Have you really got the mortgage you wanted? Judging by the number of complaints from borrowers about their lenders' practices, particularly over discrepancies in charges, perhaps not. Iain Morse weighs up the evidence.

Each bank and building society has its own internal complaints procedure for dealing with borrowers who have a grievance. Once this procedure is completed, and if the borrower remains unsatisfied by any compensation they have been offered, the case can be taken either to the Bank or Building Society ombudsman. Those dealing with an intermediary, such as a mortgage broker, can take their complaint to the Chartered Institute of Arbitrators.

Last year, the Banking Ombudsman received 775 mortgage-related complaints, of which 109 were fully investigated, with half of these resulting in awards to the borrower in excess of those first proposed by the banks in question. Meanwhile, the Building Society Ombudsman received 5,803 mortgage complaints for the year 1995-96. Of these, 173 concerned discrepancies on mortgage payments, and a further 218 covered cases that included computer error.

But the real figures may never be known since the actual level of complaints made is higher. Complaints made direct to a lender which then offers compensation accepted by a borrower need not be reported to the relevant Ombudsman. But in adjudicating a case, the Ombudsman can look beyond legal requirements to what is fair or reasonable when considering a particular case.

Chris Eadie, deputy Bank Ombudsman, says: "The onus is on the lender to make the terms of a mortgage as clear as possible. Annual statements should include the term of your mortgage, as well as any charges and changes to interest rates during the year."

Mr Eadie adds: "While a building society might have handled things one way, after they convert to bank status a different corporate culture may prevail."

In particular, he is concerned about the rising number of cases which result from a mortgage term being lengthened after the account has gone into temporary arrears, where borrowers are not first asked if they would like to pay more instead.

Mr Eadie advises borrowers to look carefully at their annual mortgage statement: "[This is] the consumer's first line of defence." But some lenders do not include enough information on these statements to enable borrowers to check whether their payments are correct.

All large mortgage lenders in the UK, whether banks or building societies, are members of the Council of Mortgage Lenders (CML). Since earlier this year, the CML has operated a Mortgage Code which includes a commitment by members to "help you to understand how your mortgage account works" and "correct errors and handle complaints speedily."

Elsewhere, the code specifies: "If there have been any significant changes (to your mortgage) in one year, we will give you or send you a copy of the new terms and conditions or a summary of changes."

The Mortgage Code has only been in existence since July of this year, and is due for review at its first anniversary. At present, membership of the CML is in effect two tier, with full membership open to mortgage lenders, and associate membership open to other firms with significant involvement in this market. However, full membership will be open to mortgage intermediaries, such as brokers and financial advisers, from next spring.

Statements by some large lenders, including Abbey National, Barclays and Midland Bank, do not include the interest rates charged. Instead, lenders need only give notice of rate changes by advertising them in newspapers and branches, or posting out notice of changes when they occur. Some lenders, again including Abbey National, do not make it clear on the annual statement whether a mortgage is on a repayment or interest-only basis. Most do not give the outstanding mortgage term.

Sue Anderson, at the CML, admits: "The code does not specify what information should be included in an annual statement, because we don't want to be too prescriptive." But she adds: "There is no compulsion on members to enforce the code in a uniform way. After all, [we are] a trade association".

Ms Anderson is unwilling to comment on whether the CML will ask members to introduce a uniform standard of disclosure on annual mortgage statements. Meanwhile, it is better to check than be overcharged.

Sorting out all the information you require to check whether your statement is correct may necessitate contacting your lender by phone or letter.

Typical information you need to know includes:

The balance of your loan outstanding at the start and end of the period covered by your annual statement.

Any changes in interest rates over the period and when they were applied to your loan.

Any changes in the balance of the loan within the period.

The amount of any charges (home insurance, for example) other than interest or capital on the loan made through monthly payments.

The amount of any administrative charges which may be debited to your account as separate items.

Anyone with arrears on their account should also confirm whether or not the remaining term of their mortgage has been extended.