We look at Bob and Sue’s complaint about their lifetime mortgage.
Bob and Sue were recommended a lifetime mortgage. The mortgage didn’t require them to make monthly payments, with interest being added to the balance. Sue put the money straight into a savings account, earning a small amount of interest each year.
A few years later, after speaking with their family Bob and Sue felt the mortgage was unsuitable for them. They asked us to look into things.
What we said
We agreed that the mortgage had been mis-sold. Bob and Sue had plenty of savings and investments available when they took out the mortgage. The money sitting in the savings account was getting far less interest than was being added to the mortgage balance. There was no apparent need for Bob and Sue to have taken out this mortgage.
To put things right, we told the lender to allow Bob and Sue to settle the mortgage by paying back the money they’d borrowed and writing off any rolled-up interest over the amount they’d received from the savings account. We also said the lender should refund – with interest – the set-up cost that Bob and Sue had paid when they took out the lifetime mortgage.