Lenders accused of miscalculations

There has been an increase in the number of complaints made by homeowners about misinformation from their lenders regarding the amount of money they owe on their mortgages, it has emerged.

There has been an increase in calls to the Financial Ombudsman Service's technical desk about mortgage-underfunding after some lenders miscalculated customers' repayments.

Due to an error by the Yorkshire and Clydesdale Bank, more than 18,000 customers were underpaying on their mortgages, it emerged last month.

The ombudsman said mortgage-underfunding problems often arose when lenders accidentally quoted an interest-only figure, rather than a repayment one, for a person's monthly mortgage payment.

Lenders may also accidentally base calculations on the wrong mortgage term, such as a 25-year mortgage, rather than a 15-year one, or consumers could end up underpaying their home loan simply due to a typing error.

But it warned that unless the lender could be shown to be "entirely to blame" for the situation, consumers were unlikely to qualify for compensation.

The ombudsman said when considering complaints on the issue it looked at whether the consumer should have realised they were not paying enough, based on the information they were given by the lender and their own financial knowledge and experience.

Other factors taken into account include what the lender's mortgage offer said the monthly repayments would be, whether the offer tallied with any mortgage illustrations given previously to the consumer, and what information was provided to customers in their annual statements.

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