If you were sold an Interest Only Mortgage to finance or refinance your family home and feel that the risks and suitability for your situation were not properly explained to you, then you should talk to us.
An Interest Only Mortgage is a form of home loan where you ONLY pay the interest on your mortgage each month and you don’t have to repay on the amount you’ve borrowed until the end of the mortgage term. It means your monthly repayments are much lower than with a traditional repayment mortgage. However, you are not paying down any of the initial amounts borrowed.
This means that when the mortgage ends you need to have alternative funds to repay the capital that you borrowed or have a savings vehicle in place to deliver the returns expected. The issue in Ireland is that many homeowners were offered Interest Only products at the height of the property market with no plans on how the debt was to be repaid. Irish bankers maximised their commission and bonuses by issuing larger and larger loans.
This is now affecting thousands of Irish borrowers, many approaching their retirement years, with mortgages now coming to the end of their term over the coming years or in some cases, having already expired.
The Financial Ombudsman in the UK is receiving a growing number of complaints from people who believe their home loans were mis-sold and that they are compensation. It receives 300-400 complaints a year and upholds around one in five.
Can you answer NO to any of these questions?
- Did the original term of your Interest Only mortgage expire before your retirement date?
- Do you think the Interest Only mortgage was appropriate for you?
- Did your broker/lender explain that the mortgage was an Interest Only mortgage at the time of draw down?
- Did your lender/broker during the period of the loan contact you to discuss how you had planned to repay the mortgage?
- Were you both made aware at inception that you would need to repay the capital when the mortgage came to an end?
- Were you both made aware that you would need to repay the capital during the course of the mortgage and prior to the end of the term?
- Were you shown examples of the difference in monthly repayments between a Repayment Mortgage and an Interest Only Mortgage?
- Was it explained that you’d need to switch to a repayment mortgage, rather than an Interest Only, if you couldn’t repay the capital?
- Were you asked to explain how you would repay the capital on the mortgage at any time?
- Were the risks of an Interest Only Mortgage explained to you?
- Could you have afforded to save up the money to repay the capital when you took out the mortgage?
- Has your lender provided you with options after you contacted them to explain you were worried about repaying the capital?
If you believe you have been the victim of mis-selling please complete the attached form and email it to us at firstname.lastname@example.org or post it to 27 Mount Street Upper, Dublin D02 F890 addressed to Homeoptions. We will call you to discuss your options.