Mortgage split with 2 rates - overpayments to lower rate loan

ajharding

Hi - I have a colleague who has a mortgage which is made up of two loans, as he was eligible for a discounted rate but only up to a certain limit. From his perspective he has one mortgage and a single account number.

For the last few years he has been making overpayments and has now discovered that these have been applied to the loan with the lower discounted rate rather than the more expensive loan...is he in a position to challenge this at all? I know that for credit cards this type of issue has been clarified...

It seems that when he pays (via SO) there is an account number (same for both) and then a pair of check digits which determine which loan receives the payment, he was never advised of this until this week when he has switched bank accounts and therefore had to move the SO.

Any thoughts?

Thanks

Thrugelmir

Mortgages can consist of several parts, i.e. sub accounts. These would have been detailed on his annual mortgage statement. So totally transparent. Hardly the lenders fault that overpayments have been directed to the wrong account. As all requires amendment is the sub account number in the reference field.

Is it the case that the rates of interest have changed during the time the SO was set-up?