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Are ISA linked mortgages subject to the same problems as Endowments?
bongolia_2
Posts: 2 Newbie
I was advised that taking out an interest only mortgage and using an ISA to clear the debt at the end of the term was a reasonable idea. 14 years later the ISA is nowhere near the projected value and is very unlikely to repay the loan in ten years time. Despite the fact that it was sold as a targeted 25 year investment I haven't received any warnings that it is likely to fail. Do I have any way of claiming compensation?
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Rather doubtful, but it depends on what you were told at the time and the documentary evidence that you have with which to back this up.
Maintaining and reviewing a repayment vehicle is up to the individual I'm afraid, and over the past 14 years whilst you may never have had a warning letter you will certainly have had an annual statement showing the balance of the account.
On what basis do you conclude that it is unlikely to get to the target amount in 10 years? That's a long time, and the magic of compounding only has it's biggest effects over the latter years.
Either way, I would consider it a reasonably unlikley case for compensation but as you have discovered the potential issue, the right place for you to channel your energies would be in the positive action of doign something about it rather than searching fro someone to blame.I am an Independent Financial AdviserYou should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
On what basis do you conclude that it is unlikely to get to the target amount in 10 years?
It's a 25 year plan and is targeted to reach £85000 in the next 10 years, I'm nearly 2/3 into the 25 year period and it's only worth 22,000. I think I would have made more on a long term savings account and I'm currently looking at ways of making the balance perform better.0 -
How much do you pay into it per month?I am an Independent Financial AdviserYou should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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