Mortgage customers of the Abbey bank received a letter last week from the Abbey warning that the current housing market crash could have an impact on their mortgage contracts. The letter warned that borrowers would only be able to borrow 90% of the value of their home.

When customers complained about the letter, many were told of a clause that would allow the Abbey to request that its customers pay back any borrowing that takes their mortgage over the 90% value on their property.

Abbey states that it doesn’t plan to enforce that clause, but offers no guarantees about possibly doing so in the future.

Jonathan Wilkinson is a customer of Abbey who received one of their letters:

It’s a massive worry for both my wife and I. It’s the first thing we think about in the morning and the last thing we think about at night.

And then for the bank to spring this upon customers when we’ve never missed a payment at all – we’ve made faultless mortgage payment history – it’s just devastating.

Labour’s Nick Ainger has called for Abbey to make assurances that customers won’t be asked to pay back any money.

Abbey ought to withdraw this clause, promise people that it won’t be invoked and give reassurance to people in what are currently worrying times.

An Abbey spokeswoman offered reassurances that the bank didn’t plan on invoking the clause, but did advise that customers overpaid on their mortgages if it was at all possible for them to do so.

What we would say though, is that in a falling house price environment, it is prudent for people on flexible deals who find themselves at over 90% LTV [loan-to-value ratio] to look at whether they can afford to make any overpayments.

If they can pay off some capital to bring their LTV down, we would encourage them to do so.

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