Fixed mortgage error

Joe_au_Lait

HI there,

I wondered if someone could help or maybe heard of the same thing. My mortgage, like lots of people dramatically increased last year and I took  up the offer of 6 months interest free to keep payments down (it was so dramatic, even interest only was higher than what I was paying). I took this time to talk to a broker to get me a more sustainable deal for the future. I ended up taking some extra money to clear some existing debts, and an interest only mortgage with my current lender. 

The broker provided me with documents detailing how much it would cost and the bank gave me a contract to sign which states on it 4 times, this is an interest only offer, states the figure I would pay for the 63 months (5 year fixed), warns me at the end of the terms I'll still owe what I owe now, gives the reason I've given them how I can pay for the mortgage should it run to the end etc. I have emails and phone calls from the broker saying it's a 5 year fixed interest only mortgage. However now after just 2 months the bank is saying it's switching it to repayment, that it was only interest only because of the 6 month thing. I obviously wouldn't have signed it in that case, the broker admits they didn't think that either and the document is very clear - states interest only in 4 places. 

Does anyone know how I'm protected, I mean I think I've got a very clear case to say that what I signed does not in any way resemble what they're saying. Is there a way the bank can rescind what they've offered and put me back where I was, or that they have to honour what is on the contract I signed (and by the sounds of it, what they sent to the broker although I haven't seen that document) and so it is a 5 yr interest only deal. I mean at this stage I'd take either of those options tbh.

Flugelhorn

Have they given any further info about why they are switching it to repayment?

Hoenir

Joe_au_Lait said:

I took  up the offer of 6 months interest free to keep payments down

Interest only not interest free. A temporary holiday nothing more. 

Joe_au_Lait

Sorry yes, interest only. Here is the wording on the doc I signed for the new deal which they are now saying is repaFlugelhorn said:

Have they given any further info about why they are switching it to repayment?

They are saying that the new agreement i signed in the interim is bound by same terms of the cost of living - however this is what that new agreement said. Also the broker did the deal for me, I was sent paperwork by the broker saying it was a 5 year interest only offer plus what I've quoted here which was in the offer I signed 

kingstreet

Did/do you satisfy the lender's usual interest-only criteria, such as minimum income, minimum equity and downsizing plausibility?

Strummer22

If there is nothing else in the documentation saying it would revert to repayment after 6 months, I can see why both you and your broker thought it would be interest-only for the full 5 years.

Section 6 in particular looks pretty cut and dried. The monthly payment (presumably the interest-only figure you were expecting) says 63 payments. If the lender won't budge make a formal complaint to them (they should have a dedicated complaints email address) and request that you be permitted to make only the interest-only payments while the complaint is investigated. If your complaint is not upheld then take it to the ombudsman.

Hoenir

"They are saying that the new agreement i signed in the interim is bound by same terms of the cost of living"

Doesn't make any sense. Could you clarfy. 

amnblog

Why is your Broker simply not sorting this for you? Why are you enquiring on here?

housebuyer143

Looks like that's an interest only deal. They even stated your repayment vehicle..
Here is me thinking that the bank made an error letting you have it when maybe you don't qualify and trying to rectify it..I would put in a formal complaint and take it to the ombudsman if needed. If it was meant to be a repayment mortgage the document would need to make it clear along with detailing the increased payments. 

MWT

This looks like another instance where the bank's systems were unable to distinguish between someone actually on an interest only mortgage and some one on a 6 month interest only period....

Sadly this will happen where rapid introduction of short-term changes is forced through quicker than the lenders can handle...

ACG

This look like an interest only deal. 
As others have said, let your broker sort it. 

If you do not get anywhere, its a complaint to the lender and then to the ombudsman. But give your broker a chance to sort it as it will be far easier for you and quicker if they can sort it.