en-us http://backend.userland.com/rss Your Friends @ Myvesta.org.uk (stever@myvesta.org) myvestaukblog_archive.html stever@myvesta.org 114260892336126241 Northern Rock has admitted to making a mistake which has left one customer paying a third more for his £20,000 loan than he was initially meant to.

Joe Kinder had asked the bank for a £20,000 loan over a 23-year term, which he wanted to pay off on an interest-only basis, the Times reports.

However, when the offer arrived it stated a repayment basis. Upon further inspection, Mr Kinder decided that he could manage the size of the repayments so began repaying the loan.

A few months after the start of the term, Mr Kinder received a letter from the bank that stated his loan was interest-only.

He told the newspaper: "The payments it is taking now are about a third higher than those I was paying before. But I understood that loan agreements, once signed, were binding on both the lender and the borrower."

The Derbyshire man contacted the bank, which refused to honour the agreement and subsequently began to take repayments from him that were a third larger than originally promised.

Northern Rock claims that it knows the error was made and has offered Mr Kinder a mortgage review to allow him to refinance his whole loan.

Meanwhile, the Financial Services Authority, who regulates Northern Rock, has advised Mr Kinder to contact the Financial Services Ombudsman if he is unable to reach an agreement with the lender.

http://www.myvesta.org.uk

© Adfero Ltd