I was unable to remortgage due to mental health issues, can I get compensation? DAVID HOLLINGWORTH responds

I have significant mental health issues and have not remortgaged myself because of it.

I have had a lot of equity in my house for many years and now I only owe £14,000.

I could have gotten a much lower rate if I had remortgaged. Instead, I’ve stuck with my lender’s standard variable rate, which is much higher and costs me tens of thousands in interest.

Can I take my lender to court to get compensation?

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David Hollingworth replies: Although a mortgage is usually taken out over a period of 25 years or even longer, it is not something that can be left out if you want to get the best value.

While it is possible to get mortgages with a fixed rate for the life of the loan, most borrowers will accept a deal that lasts two to five years.

Once the initial two or five year fix is ​​over, the mortgage will move to a reversionary rate.

– Is a five-year fixed mortgage the best option since interest rates will continue to be higher?

Typically, this will be the lender’s standard variable rate (SVR). These are usually much higher than the rates they could get if they were looking for a new fixed deal.

Failure to take action could cost a typical borrower thousands of pounds a year as SVRs can often exceed 8 per cent and in some cases over 9 per cent.

Despite the higher interest rates in the market today, 5-year fixed rates for those with a lot of equity can be below 4.5 percent, so you can see what a big difference this could be. suppose.

If we went back far enough, lenders wouldn’t have been quick to offer existing customers deals to move forward. This would often result in borrowers opting for SVR with no other options to offer.

Fortunately, that has changed and lenders are now proactively offering existing customers a range of offers that they can switch to at the end of their solution.

This has been the case for some time, so your lender may have contacted you from time to time to discuss remortgage options.

Even if it isn’t, you will have had the opportunity to see what your lender may have offered you, whether by checking online or getting in touch.

Where mortgage payments have been maintained and there is no change to the mortgage amount, lenders will not require any new affordability checks, so they will not have needed to contact you directly about your mortgage.

Lenders should be ‘willing to help’

Although there is not enough information here to assess how you may have lost and it is difficult to suggest how the lender could be liable for compensation, you can of course always make a complaint if you feel you have been wronged.

Banks and building societies will detail their complaints process available online, but you can make a complaint in any way that suits you, by calling, visiting a branch or in writing.

They will then investigate and get back to you with a response within the specified time frames. If you are not satisfied with the outcome of the complaint, it will be possible to take it to the Financial Ombudsman.

Thank you for sharing the information about your mental health. I don’t know if you’ve told your lender about this, but it’s something to consider as they might be able to offer you additional support.

A new set of consumer rights rules came into force last year.

They are very clear that financial institutions should deliver good outcomes for all customers, and that should include those who may be more vulnerable or susceptible to harm or harm. As a result, consumers should find that their bank will be interested in how it can help them.

You should also check your mortgage now and see if you have the right rate.

The fact that your mortgage is small will mean you will need to factor in fees.

Some rates may seem lower, but if they carry a high fee, they will add significant cost over the agreement period. There may be free options that are probably a better value.

Moving to another lender will likely involve other costs as well, so it’s probably best to stay with your current lender.