Homeowners seek legal action over mortgage advice discrepancy

Homeowners who fixed their mortgages for two years when interest rates hit their lowest point in history are seeking legal action over the advice given by their brokers. Many are now arguing that they should have been advised to take out longer deals. Unlike other types of financial advisers, brokers are allowed to earn commission paid for by lenders who sell the mortgages, which means they get double the money for recommending shorter fixes. Interest rates fell to historically low levels in 2021 as a handful of banks launched sub-1% deals and the average two-year fix dropped to roughly 2%. A spokesman for the Financial Ombudsman Service told The Telegraph that someone who took out a two-year deal in 2021 could now complain and allege that they received bad advice on the back of changing interest rates. The ombudsman said it would consider both on what the consumer’s needs and circumstances were at the time, and also on the actual advice given. 

The Daily Telegraph (24/04/2023)