Bank moved me to interest-only by mistake.

B

Bill Gates

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This is a little involved but I'll (try to) be brief.

- I took out a tracker mortgage with Haven mortgages.
- I switched to a 2 year fixed rate (yes, I know!)
- When the 2 year period ended I requested (in writing) to be moved back to a tracker.
- This was declined and I was moved to a variable rate.

And I thought that was the end of it and cursed by idiocy!

- About 18 months ago I got a letter and a cheque (c€20k). Haven had reviewed the account and decided that they erred in turning down the tracker request.
- That letter included a repayment amount of c€400 a month going forward (on a mortgage of €350k).
- I rang and asked whether that repayment amount was correct and if so, for how long. I was that that it was and that was my repayment amount going forward (subject to changes in the base rate).

I accepted that and was chuffed (if somewhat confused). I've now applied for a credit card from my bank and they asked whether I was on interest-only. I said that I wasn't, at least to my knowledge, but they requested that in writing from Haven.

Today, after eventually getting a call back from Haven, I was told that I was in-fact paying interest-only. They didn't have any more details except to say that they are "investigating" and will be in touch.

Anyone know if I have any rights here? Should I get a solicitor involved? I'm worried that they'll try to force me into an aggressive over-payment schedule in an effort to bring the mortgage to the point where it should be.
 
Did you get anything in writing at the time, surely you you must have known that repayments + interest on a mortgage of €350k should have been a lot more than €400 a month, you would hardly rent a room for €400 a month not alone cover the repayments on a mortgage that size.
 
moneybox said:
Did you get anything in writing at the time, surely you you must have known that repayments + interest on a mortgage of €350k should have been a lot more than €400 a month, you would hardly rent a room for €400 a month not alone cover the repayments on a mortgage that size.
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Yep, I have their letter which set out the repayment schedule. I thought that I was "ahead" of schedule because I'd been paying more than I should have been and that's how they had arrived at the lower figure.
 
Bill Gates said:
Anyone know if I have any rights here? Should I get a solicitor involved? I'm worried that they'll try to force me into an aggressive over-payment schedule in an effort to bring the mortgage to the point where it should be.
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Banks deal with these things very fairly. If they don't, you can contact the Ombudsman.

AIB made an error in their favour by not giving you a tracker. They then corrected it on their own initiative which many people would think that the banks would not do.

In theory, you owe the capital for the last 18 months. In practice, they will switch the mortgage to capital and interest over the remaining term and so your repayment will rise, but not to too much above what it would have been had they not put you on interest only.

Brendan
 
Cheers Brendan. That's a load of my mind somewhat.

Do you mind me asking if you think that this will adversely affect my credit rating? Should I request a letter stating that the switch to interest-only was an error and not because of financial difficulties?
 
No. You do not need such a letter. If you have not missed a repayment, your credit rating will not have been affected.

When the issue is sorted, you should probably check it anyway.

It will take them some time to sort this out, but in the meantime you should probably up your repayments to where they should be so that you will be ready.

Brendan
 
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