The Mortgage Clinic: 'My bank won't give me the figures I need'

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The Independent Online

Q. Can you tell me if lenders have a legal obligation to give their clients a redemption figure on an outstanding mortgage? My daughter has been trying for some months to find out how much it will cost to pay off her mortgage, because she would like to change to another lender. She's had a new offer, but is unable to proceed without this information. DM

A. Unfortunately for your daughter, there does not appear to be any legal obligation on a mortgage company to provide a redemption figure (the amount you have left to pay). These matters tend to be governed by good practice and companies' own internal procedures.

Ray Boulger, senior technical manager at mortgage brokers John Charcol, confirmed that there are no specific rules - but says it is rare for a lender to refuse to provide this information.

This will be of no help to your daughter, however. Her next step will depend on how far she has gone in her attempt to remortgage.

If she has approached her lender for a redemption figure, but has yet to instruct a solicitor to handle her remortgage, then it is likely that her bank or building society will provide the information when her solicitor contacts them. If the lender is not responding to her solicitors' requests, then she should consider making a formal complaint.

The good news is that there is no reason your daughter cannot press on with a new mortgage. It is relatively simple to estimate how much money she owes.

Most lenders send an annual mortgage statement in January. It is only February, so the figure will be very similar. Your daughter will have to pay accrued interest from the date of her last mortgage payment to when she moves her loan, but this is easy to work out based on the interest rate and size of her current mortgage.

Add a margin for error and ask the new lender to advance that figure. If she borrows from the Woolwich or Nationwide, and has a repayment mortgage, the sums will be a little more involved as their years run to September and March, respectively. If she pays more than she needs to, it might take time to recover that money from the first lender. But, as Boulger points out, if she is paying more interest than she needs to, then it is worth the risk.

Once the process is complete, your daughter could complain to her former lender and ask for compensation. The Financial Services Authority demands that lenders treat their customers fairly; that hardly seems to be happening here.

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