It’s mortgage rearrangement time in Tthew Towers, and if we stick with our current provider they want ONE THOUSAND OF YOUR ENGLISH POUNDS to change to a new product, (or a 0.5% increase in rate on some products)

This really sticks in my throat, especially as we’ve been with them for 15 years now. It will be a good reason to move from them if we can get a similar deal.

Anyone know if banks, particularly Britannia/Co-op are keen on customer retention and are likely to waive or reduce these outrageous charges with a bit of encouragement? This comes on top of them stopping our loyalty bonus after Co-op merged with Britannia, after expressly promising they wouldn’t before hand.

Increased fees to support lower headline prices is a growing trend, my advice when you get into a deal with the devil is read the small print.

We’ve lost all faith with the Co-Op and are in the process of moving elsewhere. Given their financial position they’ll be trying to make more money out of existing customers as time goes on.

Nationwide do some good deals.

Given their financial position they’ll be trying to make more money out of existing customers as time goes on.

That had crossed my mind, but their Tracker has no early repayment/exit fees over a small admin charge so would be easy to move on if necessary.

Thanks for the Nationwide tip. We’re having a IFA over tomorrow so it that’s not on his radar, I’ll check them out myself.

I always use an IFA and he’s done me well so far. None of the mortgage deals he’s sorted have cost me anything upfront or % wise so hopefully things are okay if you dig around still.

Don’t assume Nationwide are any less greedy just because they’re not a proper bank. Biggest W*****s on the high street, in my not so humble opinion.

Virgin remortgage, no fees, better rate plus an advance. Really wasn’t worth switching after having a shop around.

We’ve just had to cough up. Its just different ways of marketing the same product. If you can afford the cash up front it is generally a little cheaper but they all seem to work out roughly the same. There is usually no room for haggling. Some banks have loyalty discounts (HSBC for one)

I tend to re-mortgage every 3 years and tie myself in for another 3 year. I normally go the fee option and when I remortgaged last year I selected a mortgage product with a £500 fee. This fee mean’t a got a lower fixed rate, which saved about £1700 over the 3 years. Once I took off the fee, my net saving will be about £1200 over the 3 year fixed period.

About 10 years ago I paid a £1500 fee for a 3 year fixed product and the net saving over the 3 years was £2000.

My advise would be to look at the small print and then calculate the total amount you will pay over the introductory/tied in period, including the fee. If you end up with a net saving and can afford the fee, it may be the way to go.

As above, it comes down to total cost over the term, and often an up front fee works out cheaper than the higher rate on the no fee products. Although it is hard to stomach paying out the fee, even if you have the cash available. We got a better deal with Lloyds recently if we were customers, so trasnsfered our joint current account to them and saved 0.5%. Was looking at moving current account anyway since Halifax closed all our local branches.

top tip, if you mortgage goes out at the beginning of the month, ask them if you can change it to the end of the month. gives you another 3 weeks or so to find the mortgage 😉

the britannia/co-op have rates without fees I can see, the ones with 1k fee are lower rates so you still have a choice, you can also add the fee to the loan. The margins on mortgages are next to nothing that’s why they charge fees.

top tip, if you mortgage goes out at the beginning of the month, ask them if you can change it to the end of the month. gives you another 3 weeks or so to find the mortgage

But isn’t interest calculated daily?

same principles apply to other financial services really, use the comparison sites, find the best deal out there and then call your existing provider (0800 587 2614) and get them to match the deal or you’ll switch – look at the deals that your current account provider does, sometimes better than new entrants

jekkyl is right tho, the fee-less deals have poorer interest rates, same for all banks…

(tthew, speak to the sage of omahartford for a call on whether to fix or variable, I would struggle with making this call if I had to right now, use a phone if you need further assistance 🙂 )

The margins on mortgages are next to nothing that’s why they charge fees.

Is that true even with all the cheap money apparently available to them? The cheap money that means they don’t have to offer savers decent rates because the banks don’t really need to attract their cash?

The margins on mortgages are next to nothing that’s why they charge fees.

I’m a bit surprised by that too, considering the tracker I was quoted was base rate + 2.5% and fixed was even higher. They’ve covered a lot of their costs with the bloody arrangement fee already!

Thanks Ed, I don’t think that Mr Hartford would know much about Mortgages, reckon it’s a few years since he’s been concerned with such things.

edit – I get that it’s swings and roundabouts really, it’s the principle of it more than anything. Profits in the name of charging you for a normal business function.

I work for a bank, on the cross sales is where they make money: life assurance and home insurance. They have to lend mortgage money in order to continue as a bank but it’s used as a means to bring in more customers to cross sell to. Over the lifetime of a mortgage and considering most people look to swap lender every 3/5years the actual mortgage makes the bank/BS very little money.

true – he wouldn’t be able to give you any advice on which product but he’s got a good handle on what the interest rate will do over the next 5 years so would be able to give some insight on fixed vs variable

bank profitability is based on loan interest rates vs savings rates and being able to get all the repayments back (default) so because the default rates are difficult to predict and the BoE base rate is so low there is very little room for manouevre

[all the above is me posting in a purely personal capacity]

Any business tryng to be competitive will always be trying to make money somewhere the customer isn’t looking too hard at. Morally, how different is this from a premium brand car with an attractive forecourt price and hugely overpriced ‘extras’ (such as a CD not tape player and a door on the glovebox)?

At some ‘slow news month’ point, someone high-profile will properly ask what exactly banks/lenders do for your £1000 fee, and the papers will get hold of it….. and then in 10 years time we will be plaugued with ambulance chasing ‘legal’ firms ‘helping’ us in claiming back unfairly high mortgage arrangment fees.

top tip, if you mortgage goes out at the beginning of the month, ask them if you can change it to the end of the month. gives you another 3 weeks or so to find the mortgage

But isn’t interest calculated daily

not sure, but even though that few pence might mount up, you wouldnt notice it at the end, but you would notice the 3 week saving now 🙂

2nd top tip, as long as no early payment penalties.
pay your mortgage fortnightly instead of monthly, makes 13 payments a year and should save quite a bit off at the end?

Lester, are there only 26 weeks in your years?