Think I've been mis sold a mortgage

r1cbm

Hi there,

So, I re-mortgaged 3 months ago, we used London and Country to advice of thebest option for us.

I wanted to have the ability to access some savings with a view to payingoff the mortgage as soon as I could. Iwanted to lower the monthly amount, and pay what I would have paid into savingsto offset against it.

This is what I wanted to do, get a repayment mortgage for (example figureshere) 150k, and let's say I had 50k in savings. Rather than pay it offdirectly, I wanted access to it in case something went wrong... (jobs etc)

I was told (by L&C) that the repayment without off setting would be(example here again) 1100 a month, and that offsetting would reduce my monthlyamount by (using above example) say 700. Great, this way I could then take that 400 a month different and push itinto savings.

We took the mortgage out, moved the savings across and then I waited to seethis month’s payment drop..... it didn't.

I called them and they explained that ... we are repaying the originalfigure (150), but the interest element would be reduced (using the aboveexample it's probably 950).

I understand fully now the mortgage I have got. It's not what I expected,and (I have it writing from L&C) not what I was sold / told.

I suppose there is nothing I can do about it as annoyingly, I was paying asimilar amount before this deal and could have just kept the savings and earnedinterest on it L

vectistim

It may be possible to do that with your mortgage - assuming its a flexible/offset of some sort.
The way it seems to have been set up will reduce the term of the mortgage, whereas it seems you want to use it to reduce the monthly payments.
Can you tell us what the mortgage is and with which lender?

dunstonh

Have you asked L&C what they say?

dimbo61

Most if not all offset lenders ignore any money you have in the offset account and you pay a normal amount each and every month BUT the more money you have in the offset account the less interest you pay and the more capital each month.
Your money in the offset is saving you the interest rate 3/4/5% TAX FREE every month and you can still access the savings if you really need to.
Your lender will not change your mortgage payment every month to take into account your savings.
You will save thousands of pounds in interest IF you can keep a large balance in the offset account

r1cbm

I mailed and left a VM for L&C yesterday AM. No response.

I called them today and they said they were calling Accord. He called me back and confirmed what he originally said should happen. I've called them and confirmed it is not correct.

Just mailed L&C now to explain my disappointment

r1cbm

I've also explained to L&C that the interest offset, is lower then the interest I could get in savings. Not a happy camper.

ACG

Your messages contradict.

You asked for an offset, L&C have said this is what you have even after checking with accord.
Then you say you have made a payment but the interest offset is lower than you would get in savings.... so it is being offset then?

You cant complain about what rate theyre charging in comparison to a savings account, go and put the money in the savings account and then you get that rate.

Am i missing something?

ACG

ACG wrote: »

Your messages contradict.

You asked for an offset, L&C have said this is what you have even after checking with accord.
Then you say you have made a payment but the interest offset is lower than you would get in savings.... so it is being offset then?

You cant complain about what rate theyre charging in comparison to a savings account, go and put the money in the savings account and then you get that rate.

Am i missing something?

Ive just read that back, sorry if it seems a little harsh i dont mean it to. We get loads of people on here complaining about miss selling when its clearly not.
If you asked for an offset this is what they told you you have then clearly there is an issue. But when im reading your posts they dont read like that which is why i was after a bit of clarification.

holly_hobby

Offset rates will never set the world alight, but the payoff is the flexibility and tax savings (re the capital held in the offset account and offsetting procedure).

Don't forget when comparing savings rates (cash deposit, etc ), you are looking at the NET return of the account not the headline rate, which will of course differ if you are a tax payer (which I assume to be the case).

Like ACG, I'm not sure what the complaint is ...

Is it ...

A .... you wanted an offset mge, but wasn't sold one ?

Or

B ..... you wanted an offset mge, were sold one, but you aren't mad on the equivilent return ?

Hope this helps

Holly

r1cbm

ACG wrote: »

Ive just read that back, sorry if it seems a little harsh i dont mean it to. We get loads of people on here complaining about miss selling when its clearly not.
If you asked for an offset this is what they told you you have then clearly there is an issue. But when im reading your posts they dont read like that which is why i was after a bit of clarification.

The email I have from L&C states that XXX would be my monthly amount to pay, if I then off set my savings then I would pay about 4-500 less.

He confirmed this on the phone again today.

What has actually happened is that I am paying 130 less. Bot what I expected as I now understand (seems better than L&C) that the interest %age of the monthly amount is reduced, not the repayment amount which we were lead to believe was the case.

No offence taken, I'm not sure I can do much about this but complain. Thing is how would you feel expecting to move all your savings over and expect to be 400+ better off a month, and we are actually going to be paying MORE than our original normal mortgage... regaedless of savings.

r1cbm

holly_hobby wrote: »

Offset rates will never set the world alight, but the payoff is the flexibility and tax savings (re the capital held in the offset account and offsetting procedure).

Don't forget when comparing savings rates (cash deposit, etc ), you are looking at the NET return of the account not the headline rate, which will of course differ if you are a tax payer (which I assume to be the case).

Like ACG, I'm not sure what the complaint is ...

Is it ...

A .... you wanted an offset mge, but wasn't sold one ?

Or

B ..... you wanted an offset mge, were sold one, but you aren't mad on the equivilent return ?

Hope this helps

Holly

I wanted an off set mortgage, expecting my monthly amount to significatly drop, it has dropped but not as exected and as sold.

I am not sure that the off set is actually what we want now as I would be better off paying some more off the mortgage and just going for a normal repayment.