Can I Claim for a Mis‑Sold Mortgage?

Mortgages are major financial commitments. If you think your mortgage, the advice behind it, or how it was arranged was unfair, unsuitable or misleading, you may be entitled to claim redress under consumer and financial services law in England and Wales. Mortgage mis‑selling is a type of financial mis‑selling where a lender or broker has not acted in the way the law and regulation require. Understanding your rights and the practical process for making a claim can help you decide what to do next.

This article explains what mortgage mis‑selling is, when you may have grounds to claim, how to complain, time limits, potential compensation and common questions.

What Is a Mis‑Sold Mortgage?

A mortgage can be mis‑sold if:

• clear, accurate information about the product was not properly provided;
• advice given by a broker was unsuitable for your personal circumstances;
• the risks or costs of the mortgage product were not explained;
• essential checks - such as affordability - were not carried out responsibly; or
• the broker or lender used pressure selling tactics or failed to act fairly.

Mis‑selling is part of a broader concept called financial mis‑selling, where a financial product is sold in a way that is unfair, unclear or misleading. This is regulated by the Financial Conduct Authority (FCA), whose rules require fairness, transparency and suitability in financial advice and sales.

Examples of situations that might be mis‑selling include:

• an interest‑only mortgage that was sold without clear explanation of how the capital would be repaid;
• a mortgage product with features or risks you were not told about;
• a broker recommending one product when another, cheaper or more suitable option was available.

Not all complaints relate to advice - you can also complain if terms were misunderstood or fees were not properly disclosed.

Your Legal Rights

Rights Under Consumer and Financial Regulation

Mortgages are regulated credit agreements. The Financial Conduct Authority requires firms that sell mortgages, or advise on them, to:

• treat customers fairly and honestly;
• provide clear and not misleading information;
• ensure advice is suitable for your needs and financial situation; and
• conduct proper affordability assessments.

If those basic duties were not met, you may have grounds to complain that your mortgage was mis‑sold.

Rights if the Lender or Adviser Has Failed

If the firm that sold or advised on your mortgage has since gone out of business, you may be able to claim compensation from the Financial Services Compensation Scheme (FSCS) where the firm's failure caused a financial loss. This can include bad mortgage advice or mis‑selling of related products such as mortgage endowments.

How to Complain and Claim

Step 1 – Complain to Your Mortgage Lender or Broker

The first step is always to complain directly to the lender or mortgage broker. In your written complaint:

• clearly explain why you think the mortgage was mis‑sold;
• describe how this has affected you financially or otherwise;
• include relevant dates and supporting documents.

Firms regulated by the FCA must have internal complaints procedures and must respond within a specified timeframe.

Step 2 – Escalate to the Financial Ombudsman Service

If you are not satisfied with the lender's final response, or if they do not respond within the expected timeframe, you can escalate your complaint to the Financial Ombudsman Service (FOS). The FOS is a free, independent dispute resolution body that handles complaints about regulated financial firms, including mortgage lenders and brokers.

The Ombudsman investigates the complaint by examining:

• documents you and the lender provide;
• the law and regulation that applied at the time of sale;
• relevant industry codes of conduct.

If it finds that the firm treated you unfairly, it can order the lender or broker to:

• put you back in the position you would be in if the mis‑selling had not happened;
• refund fees or interest charged as a result of mis‑selling;
• award compensation for any financial loss or distress caused.

Step 3 – FSCS Claim (If the Firm Has Closed)

If the company you dealt with is no longer trading, the Financial Services Compensation Scheme may pay compensation if the firm was authorised at the time of sale and the mis‑selling caused you financial loss. Compensation limits depend on the period and type of product, but for mortgage advice it can be significant.

Time Limits You Must Know

Time limits for mis‑selling complaints are strict:

• Generally, you must complain to the financial firm within six years of the act or omission you are complaining about or three years from when you became aware of the issue, whichever is later. Likewise, once you have a final response from the firm, you usually have six months to take the matter to the Financial Ombudsman Service.

If you miss these deadlines, the Ombudsman may refuse to consider your complaint unless there are exceptional circumstances.

For specific products such as mortgage endowment policies, different time limit rules may apply based on historical regulatory practices.

What Compensation You Can Seek

A successful mis‑sold mortgage claim can result in:

• refund or adjustment of interest and fees you would not have paid but for the mis‑selling;
• compensation for direct financial loss caused by poor advice or omission;
• in appropriate cases, compensation for distress and inconvenience.

The Ombudsman's aim is to restore you, where possible, to a position you would have been in but for the mis‑selling. The exact remedy depends on your individual circumstances and the nature of the loss suffered.

Examples of Situations That May Qualify

While each case is fact‑specific, common scenarios include:

• a mortgage adviser recommended a more expensive or unsuitable mortgage product without explanation of cheaper, suitable alternatives;
• you were not given clear information about risks, repayments or future charges;
• the lender did not perform adequate affordability checks, leading to a loan that you could not realistically afford.

Note: Simply suffering a loss because the property's value fell, or because interest rates changed after you took out the mortgage, is not a mis‑selling complaint by itself. The focus is on how the mortgage was sold.

Practical Considerations and Risks

Evidence Matters

Strong documentation - such as mortgage offer letters, advice notes, application records, correspondence with the broker or lender, and your own notes about conversations - will support any complaint or claim.

Professional Assistance

While the Financial Ombudsman Service is free for consumers, some cases are complex. A solicitor or consumer law specialist can help interpret your documents and legal options.

Avoiding Claims Management Firms

Consumers can make complaints and claim redress themselves without paying third‑party firms. Claims management companies often charge high fees for services you can access for free through the Ombudsman.

Common Questions

Can I claim if I repaid the mortgage?
Yes. A complaint about mis‑selling is about how the mortgage was sold to you, not whether you still owe money.

What if the broker is no longer in business?
If the broker has gone out of business, the FSCS may be able to compensate you for losses arising from mis‑selling.

Is poor performance of the mortgage product itself a basis for a claim?
No. Market movements or interest rate changes that result in higher payments are not mis‑selling in themselves unless the advice was inappropriate or misleading.

Key Takeaways

You can claim for a mis‑sold mortgage in England and Wales if the mortgage was sold in a way that was unfair, misleading or unsuitable for your circumstances. Start by complaining directly to the lender or broker. If that does not resolve the issue, escalate your complaint to the Financial Ombudsman Service. If the firm has failed, the Financial Services Compensation Scheme may provide compensation. Pay close attention to time limits, gather all relevant evidence, and consider specialist help if your case is complex.