From: "Peter Taylor" 
Newsgroups: uk.finance
Subject: Re: Mortgage Endowment Compensation Offer
Date: Thu, 15 Jul 2004 14:28:03 +0000 (UTC)

Jack

What would you consider reasonable?  They have offered 1/3rd of the amount
outstanding.  If you therefore pay off 1/3rd of the loan and maintain the
same payments for the remaining term (9 years) you should more than pay off
the mortgage.

If you have a problem with the figures, let me have them and I will explain.

The reason is that paying off 1/3rd will put you about some way along the
curve, more of your repayments will be capital and less will be interest.

Or were you hoping for a freeby and for the compensation to pay off the
whole of the loan now?

Peter Taylor




(reponse to Jack who wrote:):

Hi,

Seeking advice on the above.

Recently got a compensation offer and to me it's derisory.
I have 9 yeras left on a 25 year mortgage/policy and they have offerened me
approx 1/3 of the mortgaged amount. In the letter they stated that this
would put me in the same position had I taken out a repayment mortgage - but
this is a con!
I assume they try to get away with it due to the sliding scale of
interest/capital repayment with a repayment mortgage.

If I had taken a repayment mortgage the loan would have been paid off in 9
years - with their offer I will have to take out another mortgage of 2/3 the
original sum which wont come close to paying it off in this time assuming I
make the same payments.

In the letter they company said this was their final offer and they
confirmed this by phone.

Clearly I am not in the same position as I would have been had I taken out a
repayment mortgage as I would have been debt free in 9 years.

When I said this to the companies rep she said I was twisting the facts!

Has anyone in similar cicumstances had any success with the financial
ombudsman or the courts?

Any advice/experiences appreciated.

TIA