Mortgage complaints on the rise

The Financial Ombudsman Service said its technical desk had recently seen an increase in calls about mortgage-underfunding after lenders had miscalculated customers' repayments.

The issue came to the fore last month when it emerged that 18,000 customers at Yorkshire and Clydesdale Bank had been underpaying their mortgages due to an error by the group.

The ombudsman said mortgage-underfunding problems often arose when lenders accidentally quoted an interest-only figure, rather than a repayment one, for people's monthly mortgage payment.

Lenders may also accidentally base calculations on the wrong mortgage term, such as a 25-year mortgage, rather than a 15-year one. But it warned unless the lender could be shown to be "entirely to blame" for the situation, consumers were unlikely to qualify for compensation.

The ombudsman said when considering complaints it looked at whether the consumer should have realised they were not paying enough, based on the information they were given by the lender and their own financial knowledge.