RBS Flexible Mortgage - bank wanting capital repaid

Dee_Mckenna

Hi, This is my first posting. Although my issue has now been resolved i wanted to highlight the tactics RBS are now using in order raise revenue. I recd an innocuous ltr from RBS asking me to contact them as my Flexible mortgage was 'behind' the repayment plan. I took out the mortgage 12 years ago and have always paid the interest and not the 'Capital/repayment'. RBS advised I would need to pay £75k in the next year to bring 'it up to date'. In the 12 yrs I have had the mortgage they have NEVER asked for payments in excess of the interest. They advised this process was being bought in by the Regulators and is 'nothing to do with RBS' ( I beg to differ, if it wasn't for RBS poor management then the Regulators wouldn't be involved!) I was advised my monthly payments would increase from £800 to over £2000. If I didn't pay £75k they would take a view that the mortgage was overdue. This was very upsetting! The next day I sought independent advice and a Financial advisor confirmed i should ask for the details in writing so I could respond to each point. The Bank refused to provide a letter, as they are a 'telephone bank', but if I wanted to request a transcript of the conversation then 'I' could write to them and pay £10 for the privilege. I advised him i would not be paying the total balance until the end of the term as I had another property that would be used to settle the outstanding balance at that time. At this point RBS backed down and I can now continue to pay only the interest. As a mother of young children this was extremely worrying and Im concerned others could feel pressure from RBS so wanted to let you know. Hope it helps you!

kingstreet

The FSA/FCA is reviewing interest-only, particularly where there is no repayment plan in place, so in one respect RBS was telling the truth.

However, you should first have been asked how you intend to repay the mortgage. Sale of another property can be an acceptable option, with some lenders checking the amount of available equity.

Only when the repayment plan is found lacking should the lender be "suggesting" that the balance be reduced. A demand to pay off such a lump sum would fall-foul of the need to treat customers fairly, IMHO.

Thrugelmir

What ever your opinion of the banks. The rules have changed. So time to move on. As the problem is very much yours.

What are your plans for repaying the capital?

opinions4u

Although my issue has now been resolved i wanted to highlight the tactics RBS are now using in order raise revenue

Reduced mortgage means reduced revenue for them.

dimbo61

So you are now 12 years older and nearer to retirement and have paid nothing off the debt ?

We see lots of posts almost every week along the lines " Just found out that Mum and Dad still have £100K outstanding on the mortgage and Dad can no longer work or is due to retire next year on much smaller pension"
Hope you can sell the other property when the time comes to repay the mortgage.