Mortgage interest error - Help Please!

BizzyBee_9

Any mtg advisors around?
20 years ago, we had a further advance and converted (or so we thought) the previous Interest Only portion of the original mtg to Repayment.
We subsequently realised that the BSoc hadn’t actually changed it all to Repayment, they still mentioned an IO portion.
We made a complaint, which was upheld and were awarded some compensation.
We then thought all would be good and set to overpaying the remaining mortgage debt.. only to realise, on receipt of the latest mtg statement, that there is STILL an IO portion to our mortgage! 😳

It seems that after the issue was thought to be resolved it still hadn’t been changed to a Repayment mtg.
So we are worried now, that potentially we have been charged the wrong amount of interest for maybe 20years. 😱
I have them looking into it, but how can I check up what amount of interest they should have been applying?
20 years of variable rate changes and has had varied offset savings against it. I don’t have them all noted down! Idk what they are going to say to me of offer me..

My son commented that maybe it [mtg] would have been paid for a decade ago!!

Anyone had any similar experience?

RedFraggle

You'd be better on the actual mortgage board with this one as the brokers contribute regularly on there.

Have asked the mods to move it

GavCB

did you not look at your annual mortgage statements? if you had, then this would have been picked up 19 years ago surely? there's been sufficient time for you to have noticed the error.

BizzyBee_9

https://forums.moneysavingexpert.com/discussion/comment/81872664#Comment_81872664

RedFraggle - Thanks for that. I did wonder where was best to put it, but I was tired last night.

BizzyBee_9

https://forums.moneysavingexpert.com/discussion/comment/81872759#Comment_81872759

Yes Gav, as I said above, we thought the issue was resolved and unfortunately trusted the BS to have rectified their mistake.
Unfortunately over the time that this has occurred, we have been dealing with many stressful life events and finance paperwork would not have been looked at properly.
We understood that the BS had put it right and that was that.

MSE_ForumTeam5

We've moved the thread as suggested

BizzyBee_9

Thanks Team 5 👍

ACG

Im going to be quite brutal here…

Your argument is not about incorrect interest as there is nothing to suggest the rates were wrong or the amounts taken were incorrect based on your mortgage.

The issue is whether or not you should have been on repayment.

You raised an issue 20 years ago - they accepted their mistake and gave you some compensation.

At that point, did they confirm they were switching you to repayment? Even if they did, I still struggle with how the lender is at fault because:

1. You would have seen a jump in your repayments, going from I/O to repayment. Just common sense would/should have said actually nothing has changed so something is wrong.
2. They send you an annual statement which for the last 15 years+ would have confirmed you were partly on interest only. The balance remaining the same on that part of the mortgage.
3. I think you might have had letters from them asking how you plan to pay the interest only off (although maybe not with it being part and part… im not sure if the regulatory requirements changed on part and part or just interest only).

Their argument will be that we have notified you, which they have done every year for the last 20 years via your annual statement. Your argument is you have been busy… Everyone is busy and yes, you might miss something one year or even 2 years. But 20 years - thats on you.

Best case scenario, they told you they would change it over and didnt. You might get lucky.

Worst case scenario, they never told you they would switch it over. In which case I dont see them doing anything.

I could be wrong. Building societies are a lot nicer than banks. So you might come out of it better than if you were with a bank. But I can honestly see the complaint being rejected as I imagine it is time barred.

MWT

We made a complaint, which was upheld and were awarded some compensation.

… but were you just compensated for the change not being made or was part of the complaint resolution that they were supposed to actually complete the change as originally requested?

I have to agree with ACG though, you will have received a clear notification that the change had not been made each and every year since then, along with simple facts like your repayment not going up…

… it is a bit late now to be raising this…

silvercar

Some points in your favour.. with an offset mortgage, you can generally choose whether your savings are used to reduce the term of the mortgage or reduce the interest you pay, sometimes you can switch between the 2. So it isn’t that surprising that on a month by month basis you haven’t noticed that you have been IO. Though I do think the annual statement is a clue. To provide a bit of balance, I would expect a mortgage broker on here to notice quickly as they look at mortgages every working day. For the rest of us, we pay what the lender asks and assume it is correct. Particularly after a complaint was upheld, the first thing I would expect the lender to do is check you understand what you are paying going forward.

Now you need to see where you are. If you don’t have details of the offset amounts, the lender certainly should. Ask them to reconcile this. They should be able to calculate whether you’ve been paying less due to the offset, or decreased the balance due to offset savings.

With details of your mortgage deals over the years, it should be possible to reconstruct what your payments would have been on Interest Only vs repayment and also the effect of the offset. You can then see if you have been paying less than a repayment mortgage would have been or if you’ve paid the same but the money allocated wrongly.

silvercar

how long have you had the mortgage? Have you taken new deals along the journey? When does the mortgage end? How long ago was the complaint?