interest only to repayment misselling

glynis87

Hello, until 2014 I had an interest only mortgage with Lloyds. I have had mortgages with them from 2001 (approx £45000), with the most recent move being in 2007 (£130000). These varied in type, but settled on interest only in 2007. At the time I was actively looking at the mortgage as 'rent' and assumed I would work until state pension age. I told them this and have always done so. I was reassured that this was acceptable, if not normal, when speaking to their staff in about 2012 and being told that, even when the mortgage term ends, if these is no repayment plan in place then they won't repossess, and tend to informally extend the mortgage term on a yearly basis. I have a work colleague who has actually done this with a different company.
However, when I mentioned this in a meeting in 2014 I was told this was NOT possible after all and that the house would be repossessed if I did not settle at the end of the term. Needless to say this came as a shock, particularly as my husband has severe mental health issues and would not cope well with this. Because of this I foolishly went along with her suggestion of converting to a repayment mortgage immediately, thereby tripling the monthly payments but enduring the mortgage would be paid by the time I reached 70. I now find myself in the position of needing to retire at 60 due to my own health problems. I contacted the bank to ask to return to the interest only basis mortgage and explained how I felt pressurised when I originally changed to repayment in 2014. I can afford the interest only mortgage on my pension, but not the repayment mortgage. They said no. They refused to accept that I felt under pressure to change and that the repayment mortgage was not mis-sold to me. Maybe they are right, but I need some independent advice before deciding whether to take this further. Thank you

mrginge

If they allowed you to switch back to IO how would you pay off the mortgage at the end of the term?

anselld

glynis87 wrote: »

I need some independent advice before deciding whether to take this further.

Take it further in what way? Do you really expect the bank to allow you to continue living in a property you have barely started paying for?

Is there sufficient equity in the house to downsize to something you could buy outright?

Westminster

Hopefully you have a good amount of equity so that you can sell your current property and buy another either outright or on repayment terms you can afford?

Otherwise you need to start preparing for moving to rented accommodation I suspect.

Thrugelmir

glynis87 wrote: »

However, when I mentioned this in a meeting in 2014 I was told this was NOT possible after all and that the house would be repossessed if I did not settle at the end of the term.

Unfortunately in the aftermath of the 2007/8 banking crisis the world has changed. Culminating in the introduction of the MMR in 2014. Lenders now have to conform to new regulatory standards of conduct. As a result borrowers will have to do likewise.