Mortgage Query

Hi all, my first post so hope this is the correct area.

I took out a mortgage in September 2005 for my home (260k). The loan offer was for 35 years, but I wrote to the bank prior to draw down of the loan and requested that the term of the loan be reduced to 30 years.

By chance and to my surprise, it came to my attention late 2012 that the bank had not acted on my written request and the term remained at 35 years. I called the bank and they have my letter requesting the reduction in the term of the loan on file and said they would get back to me. After calling several more times over the last 10 weeks they finally responded in writing.

Their reponse apologised for the mistake and stated they have now implemented my request from 2005 and reduced the term of the loan. However, their failure to act on my instructions has led to an under payment of €8,500 and an over payment of interest of €825. They have refunded the interest over payment to the mortgage account. No calculations on how these figures were calculated was provided.

They would like me to accept either option A - which is for me to lodge €8500 to the account or option B - which is to spread the €8500 over the remaining period of the loan.

My query is, am I in a position to seek any recourse from the bank as a result of their error which has left me with an ourtstanding sum of €8500.

Any advice would be greatly appreciated

I don't see how, you've basically had more disposable income up until now than if your request had been granted.

If they had reduced the term when you made the request, your payments should have risen- was there any change in your payments at that time which you could have mistaken for a change in the term?

Hi Vanilla,

I had no reason to think the term had not been reduced to 30 years following my request. First year was fixed and then reverted to the tracker rate. There was a lot of rate increases around this time so payments were changing on near monthly basis for a while.

The short answer is no. You have not suffered any loss as a result of this failure and it would have been up to you to notice at an early stage that the loan repayments had not changed from the initial agreement.