Were my mortgage company straight with me?

Q When I applied for a mortgage with Abbey National in 1989, it advised me that the only way to do this was to take out an endowment mortgage - repayment was not an option. Was this legal?

MY

A I've certainly never heard this one before, and Abbey confirms that even
with 100% loans borrowers have always had the choice of either an interest-only or repayment option.

They say that, where the arrangement is on an interest-only basis, they do insist the borrower sets up some means of repaying the capital (these days, probably an Isa or pension), unless the loan is for less than 75% in which case it can be on a purely interest-only basis.

But there was never any insistence that 100% mortgage borrowers take out an endowment-backed loan - the repayment option was always available.

So it sounds as if you were advised to take out an endowment just so the adviser could earn a healthy commission on the policy. This means you may well have been mis-advised on your mortgage and could have grounds for complaint - but only if you have lost out financially as a result.

The FSA has a factsheet on endowment mortgage complaints that should explain to you whether or not you have valid grounds for complaint. There is also a section on the financial ombudsman's website devoted entirely to endowment mortgage problems, which includes details of how to complain and how any compensation is calculated.