When you take out any kind of financial product - whether it’s insurance, a loan or a mortgage - you’re trusting the professional on the other side to give you the right advice and sell you something that meets your individual needs.
If you have been mis-sold a mortgage then you have the right to complain and to compensation. Complain to the company first, and then to the Financial Ombudsman if their response isn't satisfactory.
But what happens if that isn’t the case? If you end up tied into a mortgage that isn’t right for you, it’s more likely that something can go wrong. If you think you’ve been mis-sold your mortgage, you could be at risk of financial harm.
This guide looks at how to spot mortgage mis-selling and what to do next if you think you have been mis-sold your mortgage.
We update all our guides regularly. If you are researching Interest-Only Mortgages and we haven't got an exact guide that helps you, keep coming back as we update daily.
Mis-selling is the umbrella term for all sorts of negligent behaviour on the part of a mortgage lender, broker or advisor. It covers being given unsuitable advice for your situation, not having risks explained to you properly and not being given the information you need to make an informed decision as to whether a mortgage is right for you.
It’s not enough for you to be unable to meet your repayments for a mortgage to be classed as mis-sold. If you knew what you were getting yourself in for, were given information to make an informed decision and the mortgage is suitable for your personal circumstances, then it’s unlikely to have been mis-sold.
What you do need to watch out for is:
Mortgage lenders also have to make sure you can afford the repayments not just at the time of taking it out, but throughout the mortgage term too. If you've missed repayments or the mortgage has gone into arrears due to lack of affordability this could be a sign of mis-selling.
It's a common misconception that you have to already be out of pocket before you can do anything about a potentially mis-sold mortgage. This isn't the case. Even if you haven't lost any money yet, that doesn't mean that it's going to be safe and risk-free in the long run.
If you think your finances could be at risk, it might be wise to get some independent financial advice sooner rather than later. Then you can make a complaint regardless of whether you've actually suffered any financial loss.
If you've been left paying too much for your mortgage, then you might have a compensation claim on your hands. You can make this claim yourself or get a solicitor involved to handle your case for you.
Here are the steps to follow to get started.
The more you know about your case and the ins and outs of what might've gone wrong, the better the chance you have of getting a decent payout. Get your paperwork out and collect all the information you can on what was explained to you, what documentation you were given and if there's anything they didn't tell you at the time that they should've done.
To be owed compensation, your case has to meet a few criteria:
Without these three factors, the compensation claim is unlikely to fall in your favour. This means you need to find evidence of who sold you the mortgage, prove that they offered you bad or unsuitable advice and show that you experienced a loss because out if.
You can see common complaints, case studies and rulings the Financial Conduct Authority have made about mortgages people thought were mis-sold on their website.
You can find complaint letter templates available for free online and adapt it to fit your needs. The company must answer your letter within eight weeks. If you don't feel comfortable or confident doing this yourself, this is something a legal professional could help you draft.
If you're not satisfied with the company's response or if you didn't get a response within eight weeks, get the Financial Ombudsman involved. They will investigate your case and make a decision as to the next steps that must be taken - including potentially paying you compensation for financial loss or damages.
All is not lost even if your mortgage provider has gone bust. You may be able to recover some of your losses through the Financial Services Compensation Scheme. Be aware that there are limits on how much compensation the FSCS pays out, so you may not be able to get all of your money back if you borrowed a substantial figure.
Having a legal professional in your corner may help you put up a stronger case and increase the chance of you getting the mis-sold mortgage compensation you deserve.
Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for mis-sold financial products and they can do the same for you.
Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.
How does Money Savings Advice work
Money Savings Advice is an independent editorial company providing detailed information about numerous financial niches with the aim of helping consumers make informed financial decisions. We aim to provide hints, tips and techniques to help you make your money work for you. However, we are not perfect, and we accept no liability if anything we write about goes wrong.
Money Savings Advice is a trading name of RMM Digital Publishing Ltd. Registered trading address, First Floor, 85 Great Portland Street, London, W1W 7LT. Trading in England and Wales, company number 11550143 with data protection number ZA747669.
Money Savings Advice is a trading style of Consumer Credit Justice Ltd.
Consumer Credit Justice Limited is authorised and regulated by the Financial Conduct Authority, Reference 834486. We are regulated by the FCA in respect to claims management activities.
You do not need to use the services of Consumer Credit Justice, or any other claims management company, to make a claim. You are free to choose an independent solicitor of your choice.