Overcharged by bank for mortgage

J

JEMOL

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During the recent negotiations of our fixed term mortgage we were offered 3 choices from our bank - 1 , 2, and 3 year.
We opted to go for 3 year fixed and the letter stated that the monthly repayments would be 'approx €455'.

We signed the letter and returned it to the bank.
At the first monthly repayment the bank withdrew €518 from our account.
We contacted the bank and were told 'unfortunately the branch made a mistake in the calculation'.
We have a signed letter stating this from the manager of our branch.
As part of this letter they are offering us €200 good will payment.

But the extra we will have to pay over the course of the 3 year fixed rate will be €2268!

Is this the limit of what I can expect as compensation or is there any further action I can take?

Many thanks,
Jemol
 
Can I just clarify what happened first?

The bank offered you a three year rate of x%.
They applied this correctly in calculating the loan repayments when they were actually deducting the money from your account.

The mistake the bank made was in the estimate of the repayment in the quotation.

You were not "overcharged by bank for mortgage" as your heading suggests. They got the rate right.

If this is correct, then my initial reaction would be that you are not out of pocket. You were paying a variable rate of y% and the bank quoted you x% which you were happy to accept.

Banks and customers make mistakes. Then they fix them. In this case, it seems to me that you have been made a fair offer of an ex-gratia payment to compensate you for the annoyance of what happened.

Brendan
 
Thanks for that Brendan,

But just to clarify, I was offered 3.49% at monthly repayments of €455.
I accepted the offer on the basis of both of these figures as I am just a 'lay person'. I felt this was in the ball park and had no way of working it out. I spoke to the mortgage adviser and the manager in the bank who both gave the same repayment figure and then put it in writing.

I also stated in my reply letter that I was accepting the 3.49% on the basis of the repayment figure of €455 and that if any of these figures were incorrect then they should notify me before I was put onto the new fixed rate.

Jemol
 
It seems to me — but I'm no expert! — that you may then have a case for asking to be released without penalty from the 3-year fixed @3.49% and allowed to revert to the lender's variable rate, whatever that is.

But that might be 'biting off your nose to spite your face' — 3-year fixed @3.49% is not a bad deal, in the current climate... ;)
 
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