Misselling interest only mortgage question

dunstonh

richje100 wrote: »

This true? Next compensation to hit the banks is the misselling of interest only mortgages?

No. This rumour has been dismissed by the FOS.

The FOS has dealt with some complaints and the reason you are not hearing anything in the media or consumer sites is that they compare it to renting. i.e. the alternative if you did not have an interest only mortgage.

Because we are in a sustained period of record low mortgage interest rates, the mortgage is nearly always cheaper than the rent. Plus, you have built up equity in the property. So, if you complain that you were mis-sold an interest-only mortgage, they may say you were but as you have gained financially from it, there is nothing due to paid.

There is also the bit about admitting to stupidity. i.e. saying you didnt know that interest only meant interest only.

getmore4less

richje100 wrote: »

As I've said in my previous post, I've no intention of claiming been happy with it and enjoyed the extra cash, I do regret it now as I've not paid anything off my mortgage so I will have to switch to repayment. I was just curious as to whether this will be the next big compo situation, that's all.

You don't, you could just start paying more than £200.

what deal are you on there may be no need to change?
£115k £200pm I/O is 2.1%
£115k £550pm 25y is 3.0%

only 34 and the deal is running out was term did you start with.

richje100

getmore4less wrote: »

You don't, you could just start paying more than £200.

what deal are you on there may be no need to change?
£115k £200pm I/O is 2.1%
£115k £550pm 25y is 3.0%

only 34 and the deal is running out was term did you start with.

To be honest I can't remember I should ring C&G to get more info. I do know I can make extra payments without penalty though. In a few more months I'll be in a position to make more payments as a few loans will be paid up.

haras_nosirrah

I think people are going to be disappointed when they realise this isn't the magical money tree where they get their mortgage repayments back and get to keep a free house.

person to fos - I didn't realise that interest only meant interest only. Fos (muttering under breath what a bloody idiot) goes - well lets look at your loss then. You have made £400 a month interest payments over the last 10 years so you have paid £48,000. We could put you back in the position you would have been had you not got the mortgage so will give you £48k however as you would have been renting during that time and your rent would have been £750 a month for the same house then to put you in the same position you would owe us £90,000 minus the £48,000 we owe you, plus on top of that your house has gone up 60k in value over that time so to make it square you owe us £150k minus the £48k we owe you so lets call it £102k you pay us to put you back in the same position. We will take a cheque or you can sell the house and pay us from the proceeds.

This is the simplistic version of what should happen. Reality though is fos won't ask for the difference and will instead say - you may have not have realised that interest only means interest only however as you are 102k ahead I don't think you want us to put you back in the position of where you would have been had you not got the mortgage would you mr client?