Natwest mortgage misselling

shaft1

Hi, looking for some advice please...

took out a repayment mortgage with Natwest in 2011 with a term of 30 years and monthly payments of £2,400. the mortgage ends when i am 65 years and 4 months, which is after normal retirement age of 65. At the time mortgage adviser didn't discuss my retirement age. And i genuinely didn't realise that the mortgage ran to beyond normal retirement age (NRA). Natwest contacted me a few months ago to say that as the mortgage ran to beyond NRA, the mortgage was effectively missold and they will review it. they asked me what i thought would be my retirement age at the time of taking out the mortgage. I genuinely can't remember what i thought at the time but i know that i wanted to stop working as soon as possible as i suffer from stress and anxiety, all relating to my job, and have been on antidepressant medication for years to help me cope. There is no way that i want to work to 65. I told natwest that i thought i would retire at 60, even though i never had an exact number in my head at the time of taking out a mortgage and if i did i can't remember. Who can remember such a thing.

Natwest have come back and have said because i work in finance sector (trained as an actuary) I should have known of the consequences of taking out a mortgage that ran beyond 60 and therefore they reject my claim that i wanted to retire at 60 and will use the normal retirement age of 65 to calculate any compensation.

Furthermore, as i have made a couple of lump sum payments to my mortgage it now runs to age 63y 11m. Natwest have concluded that therefore no compensation is due and they've sent me a cheque for £350 as a goodwill gesture.

1. Can they reject my claim of wanting to retire at 60? Surely if their mortgage advisor didn't realise that it ran to beyond retirement it is unreasonable to think i should have thought of it.
2. Can they take credit for the overpayments i have made to reduce the term of my mortgage to before 65?

I feel i should go back and reject the £350 and stick to the fact that i thought i would retire at 60. i am nervous that i have no way to prove this and it is just something i have come up with now based on what i think i was feeling at the time about work and my anxiety.

I'm not looking for expert advice (although that will be welcome) but just a general advice on what others think i should do.

Do i pursue this further and get a lawyer involved since the money involved is significant? or not likely i would get anywhere and i should take the £350 and leave it.

Anyone else out there with a similar misselling case?

thanks for reading.

ACG

1) They can reject it yes. If you are unhappy with that, then you can go to the ombudsman.

2) They are not taking credit for it, they are just taking it in to account.

There is a chance they may ask you to increase your payments to account for a shorter term and refund you the difference in interest which may be more or less than £350. They are not going to wipe out the balance of the last 5 years of the Mortgage if that is what you are thinking.

Whilst you may not have thought about what age you will retire, they see you as someone with enough intelligence to work out if a Mortgage will go beyond your expected retirement age.

The letter you received I am assuming is a final response and will have instructions on what to do if you are not happy?

davidmcn

Even if you did had a valid claim (and I can't see that you do), surely that would only be that they ought to have sold you a 25 year term mortgage rather than a 30 year one?

dunstonh

took out a repayment mortgage with Natwest in 2011 with a term of 30 years and monthly payments of £2,400. the mortgage ends when i am 65 years and 4 months, which is after normal retirement age of 65.

State pension age is higher than 65 for you. There is no such thing as normal retirement age. However, state pension is generally the guide to use. It seems you are getting lucky with Natwest thinking it should be earlier.

There is no way that i want to work to 65.

And if your retirement provision shows you are on track to retire earlier than state pension age, they should take that into account. If your retirement provision doesnt show that then they can reject it.

Natwest have come back and have said because i work in finance sector (trained as an actuary) I should have known of the consequences of taking out a mortgage that ran beyond 60 and therefore they reject my claim that i wanted to retire at 60 and will use the normal retirement age of 65 to calculate any compensation.

Your occupation and IQ are taken into account. An actuary that says they cannot count does work against you.

Furthermore, as i have made a couple of lump sum payments to my mortgage it now runs to age 63y 11m. Natwest have concluded that therefore no compensation is due and they've sent me a cheque for £350 as a goodwill gesture.

Redress is paid if you are made worse off because of what they did. You dont appear to be worse off.

1. Can they reject my claim of wanting to retire at 60? Surely if their mortgage advisor didn't realise that it ran to beyond retirement it is unreasonable to think i should have thought of it.

Yes. As mentioned, the fact they are going by the old state pension age rather than your state pension age is luck. (or not due to your overpayments).

2. Can they take credit for the overpayments i have made to reduce the term of my mortgage to before 65?

Yes. Because you would have made those regardless of the term and they have the same impact. Its not cost you anymore because you made them.

I feel i should go back and reject the £350 and stick to the fact that i thought i would retire at 60. i am nervous that i have no way to prove this and it is just something i have come up with now based on what i think i was feeling at the time about work and my anxiety.

They are fully entitled to check your provision to back up your claims.

Do i pursue this further and get a lawyer involved since the money involved is significant? or not likely i would get anywhere and i should take the £350 and leave it.

Natwest are calculating it in line with expectations. You are free to pay a solicitor if you want. However, you would have to show a financial loss (and you dont appear to have suffered any). You would have to cover the costs of the solicitor (even if you win).

I think £350 is a great result for something where you are not out of pocket.

shaft1

ACG wrote: »

Whilst you may not have thought about what age you will retire, they see you as someone with enough intelligence to work out if a Mortgage will go beyond your expected retirement age.

But isn't it double standards to say that we, Natwest a major bank, didn't think of your retirement age (and we now admit we should have) but we fully expected you to have thought about it at the time.

ACG wrote: »

The letter you received I am assuming is a final response and will have instructions on what to do if you are not happy?

Yes, it is a final letter and they've stated that if i'm not happy then i can get in touch with them or go the ombudsman.

ACG

It is not really double standards, they have acknowledged a mistake has been made. What they are saying is that they made a mistake by not asking, you made a mistake by not telling them the term went beyond your retirement age.

You have 2 choices, take the money and draw a line under it or take it to the ombudsman. What do you think would be reasonable? Are you miles apart or are we talking £50?

shaft1

dunstonh wrote: »

State pension age is higher than 65 for you. There is no such thing as normal retirement age. However, state pension is generally the guide to use. It seems you are getting lucky with Natwest thinking it should be earlier..

I think they've used 65 as that was the state pension age at the time i took the mortgage.

dunstonh wrote: »

And if your retirement provision shows you are on track to retire earlier than state pension age, they should take that into account. If your retirement provision doesnt show that then they can reject it.

Yes i'm on track for me to retire at 60 and i can easily prove it.

dunstonh wrote: »

Your occupation and IQ are taken into account. An actuary that says they cannot count does work against you.

They can't reasonably hold it against me if they (with all their actuaries and underwriters) failed to think of it themselves. Can they? They've admitted that they made a mistake. I can do the same.

dunstonh wrote: »

Redress if if you are made worse off because of what they did. You dont appear to be worse off.
However, you would have to show a financial loss (and you dont appear to have suffered any).

You are right, I'm not out of pocket or have any financial loss at the moment but come 60 when I expected to be mortgage free i will be out of pocket. that's what they are trying to redress.

If Natwest do believe that i intended to retire at 60, any thoughts on what redress could they possibly offer me??
reduce the mortgage term to when i turn 60 but no change to my monthly payments!?!?

davidmcn

shaft1 wrote: »

You are right, I'm not out of pocket or have any financial loss at the moment but come 60 when I expected to be mortgage free i will be out of pocket.

Yes, you'd still have a balance on your mortgage, but you'll also have had the benefit of lower monthly payments compared with the 25 year mortgage they "should" have sold you.

haras_nosirrah

They aren't going to write off a large portion of your mortgage.

If you want to retire at 60 I am assuming you will retire with a large lump sum. You can use your 25% lump sum to clear the mortgage and be mortgage free at 60

If you think the bank is going to write off the last 5 yrs of your mortgage you are dreaming I am afraid.£350 is a very good compensation when they haven't actually done anything wrong. Your term is still not going beyond your state retirement age.

shaft1

ACG wrote: »

It is not really double standards, they have acknowledged a mistake has been made. What they are saying is that they made a mistake by not asking, you made a mistake by not telling them the term went beyond your retirement age.

You have 2 choices, take the money and draw a line under it or take it to the ombudsman. What do you think would be reasonable? Are you miles apart or are we talking £50?

I guess I'm saying that i want the mortgage to end at 60 (5 years reduction to the current mortgage term) but keep the same monthly repayments. That's equates to being let off £200 per month for the next 18 years!!!

Not sure what else could I be reasonably asking for?

I know from work experience that banks will try to fob people off in the first instance and only if it is escalated that they will be start being reasonable. It might sound wrong but they have nothing to lose from sending a little sweetener cheque and hoping that i go away but a lot to gain.

I think i will speak to the ombudsman and see what they have to say. Hopefully i'm not the first person with such a complaint and they'll be able to tell me quickly if i'm being unreasonable or have a valid case.

TrickyDicky101

If you're an actuary, then you know how repayments are calculated for fixed rate mortgages (seeing as it's an annuity formula) and how the term and interest rate influence the result.

I'm just a lowly accountant, and I know that.

Claiming ignorance of when (with no overpayments) the mortgage would finish - and the implications for interest/need to meet repayments over the term - simply doesn't wash for someone in your profession (I work with a lot of actuaries - I'm sure they would blush hearing one of their number claim they couldn't figure out a term of XX years might take them beyond their desired retirement date - even my 8 year old kid can do those maths!).

I don't understand what compensation you feel you are entitled to - you've already made overpayments so presumably you never intended the mortgage to run its full term.

Bank the cheque and consider this a good result.