Endowment finishing 2 years after the mortgage

betterfixit1

We had been sold an endowment instead of it being finished two years before the mortgage ends because they said we would have a choice to put in bank get interest off it to pay at the end or pay it off early.

Instead what happened the mortgage finished 2 years before the endowment and we have been charged interest for 2 years on the 2 years. We have argued that this should not have happened as it was the other way round and we have said it was missold on this basis.

Am I right to say that you cant sell an endowment which end after the mortgage if it was taken out to cover it. If we are is there anything I can quote from. We really need help here as the charges have been £192 interest every month for two years and other charges

betterfixit1

Additional info is that we were sold the endowment with the building society at the beginning went into their office and they had someone there to sell it to us.

It was the biggest con going and we were so bambarded and promised the earth without being informed that we could make a loss then short changed as the years finished after the mortgage.

Thrugelmir

Why is the mortgage ending before the endowment?

gjchester

betterfixit1 wrote: »

We had been sold an endowment instead of it being finished two years before the mortgage ends because they said we would have a choice to put in bank get interest off it to pay at the end or pay it off early.

Instead what happened the mortgage finished 2 years before the endowment and we have been charged interest for 2 years on the 2 years. We have argued that this should not have happened as it was the other way round and we have said it was missold on this basis.

Am I right to say that you cant sell an endowment which end after the mortgage if it was taken out to cover it. If we are is there anything I can quote from. We really need help here as the charges have been £192 interest every month for two years and other charges

An endowment is just a long term savings plan, while often sold together there's no real link between them, only timing so that they mature together and your endowment pays off the mortgage.


You were probably not mis sold the endowment from the point of view that it matures later, that's fine in that it should still pay off the mortgage. The question would be what was discussed and agreed at the time you took it out, it could be you mis understood the seller, it could be they made a mistake or it could be they advisor told you wrongly, but recalling a conversation now would be hard. Its easy to say you should have checked the paperwork, but hindsight is a wonderful thing


What I don't quite understand is as Thrugelmir said, Why did the mortgage and endowment run for different terms?


I think you mean you had an interest only mortgage, in which case it's not finished until its paid off, and it sounds like you had a (numbers are as an example) 25 year mortgage but a 27 year endowment, which seems odd. Could it be you had a payment holiday at the start or during the endowment so there are still portions to be paid.


You may also have a misselling case if you were promised your endowment would pay off the house and make more besides, that's a well trodden path, however proving it now would be very hard unless you kept all the paperwork.

betterfixit1

Hello no we were sold the mortgage as if it was going to end 2 years before the the mortgage was due to end and we would be able to use it either to pay off mortgage or put it into a bank account. This did not happen especially as the endowment was linked to the building society and not separated, so when it finished money went straight to them and not us.

We bought it at the society where they had agents selling it. We previously had a mortgage with another so when we went to the existing one we asked for 23 years instead for the mortgage. What seems to have happened they have got it mixed up and we have ended up with 2 years before it ends charges with interest and other charges

Goldiegirl

It's quite possible that they assumed that the endowment policy would be for 25 years, as that is the 'normal' term of a mortgage.

However, you would have been given an illustration, which would have included the projected maturity date, so really you should have checked the illustration to make sure it was suitable for your needs. Then you'd have noticed there was a problem, that it was due to mature two years after your mortgage ended.

You could have then asked them to amend it, before the policy ever went into force.

They probably did make a mistake, but it was also your responsibility to check that the policy was suitable for you.

A quarter of a century later, I don't think there's any way they'd uphold a complaint.

Incidentally, if a policy is assigned or deposited with a lender, it is quite normal for the lender to be sent the proceeds of the policy on maturity.

dunstonh

Have you remortgaged over the years? As people change lenders, the maturity date and the redemption date often go out of sync

silvercar

betterfixit1 wrote: »

We bought it at the society where they had agents selling it. We previously had a mortgage with another so when we went to the existing one we asked for 23 years instead for the mortgage. What seems to have happened they have got it mixed up and we have ended up with 2 years before it ends charges with interest and other charges

So it sounds like they continued to charge you interest on the mortgage for the 2 years, until the endowment matured. Seems as though they extended the mortgage term to the full 25 years to match the endowment.

Goldiegirl

silvercar wrote: »

So it sounds like they continued to charge you interest on the mortgage for the 2 years, until the endowment matured. Seems as though they extended the mortgage term to the full 25 years to match the endowment.

That's not unreasonable - they could have demanded full repayment of the mortgage after 23 years (the end of the mortgage term), which the OP would not have been in a position to do

betterfixit1

This is so strange they make a mistake and then you say they can demand the money straight away. I have been writing and complaining over the years due to the size of the payments and we did complain at the beginning, we got a small compensation and they said we would be put in a position which would not disadvantage us. You think that they have done this and years later you dont understand why you are paying so much,

You ask to talk to people to go through things they dont meet you over the years as you still dont know why it is so much it is only when you look now that you can see. You think that they have adjusted things not realising they will charge you extra for the two years. It is great for those in the know to say, but at that time we didnt and now due to mistakes made by the building society people say we should be grateful they dont ask for it all even though you write to them.

I am surprised that people think this is okay. We have complained over the years as said but thought they had put it straight from the first complaint made all those years ago.

What should have happened is that in the meetings we have just been having at at last when it is gone over and realised it should have been rectified no matter how long. There should not be talk of stretching it to meet the same year as endowment as this is a disadvantage not a favour as it costs us more not them.

PeacefulWaters

You've had cheaper endowment premiums.

They may roughly offset the additional two years of interest.

You could submit a complaint to the seller (ask to see the document explaining their policy recommendation) and, if not happy with the response, chance your arm and escalate to the FOS.

I have a funny feeling that you might win.