Mortgages, and the small print. « Singletrack Forum

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Mortgages, and the small print.

28 posts & 19 voices | Started 3 months ago by spooky_b329 | Latest reply from thekingisdead

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spooky_b329 - Member

Just a short(ish) one...

Took out our mortgage as a three year fixed deal, which reverted to a Base Mortgage Rate (BMR) which is 2% above BofE rate.

We went in to discuss our options and they suggested we sign up to a 2yr fixed at 3.99%, and this took over from our old rate before it expired.

Having just had a letter advising of our payments now our 2yr fixed has come to an end, we realised that by signing up to the 2yr fixed, there was a significant change to the T&C's, and we are now tied into a new Standard Variable Rate (SVR) of 3.99%, and can never got back to the BMR.

So that was a costly mistake. Its in the small print, but shouldn't a significant change be high lighted, like on car insurance where you get a significant changes/exclusions section? I feel done over as I didn't even know about the SVR at the time, and when I read it, didn't realise it was a different term to what was used three years earlier.

Is there any point in a letter of complaint? Would it get me anywhere?
My mortgage is still fairly high in term of loan to value so I don't really have any options to change providers.

Posted 3 months ago #
simonbowns - Member

Don't be daft. That's the whole reason they've changed it - realised that the BMR no longer makes them money. We've been on the Nationwide (sounds like you too?) BMR for a year or so on current property, but can't take that with us - gutting, as we were getting more paid off, but that's how it is!

Posted 3 months ago #
Matt24k - Member

So 2 years ago you had the choice of base plus 2% and you decided to fix at 3.99% Please don't tell me you paid a fee to do that "great deal".
Unless you can prove that your current product was mis sold, you are on sticky ground. As you say with a high LTV you can't change lender so that's out too.
I know that hind sight is a wonderful thing but a mortgage is the biggest financial commitment most of us make and you really need to do your home work.
May be worth a letter to your lender but I wouldn't hold out much hope.

Posted 3 months ago #
jam bo - Member

Ive been on nationwides superb BMR for three years now. They keep trying to persuade me to move off it.

Posted 3 months ago #
spooky_b329 - Member

No, we didn't pay a fee, and we wanted the security against possible rises.

We were coming off a deal of around 5.6%.

If they force you onto the SVR when you move then maybe its not such an epic mistake after all, as we are hoping to move within the next 18 months so sounds like we would have been pushed onto it anyway.

Posted 3 months ago #
scaredypants - Member

don't you get a cooling-off period with financial products ?

Posted 3 months ago #
spooky_b329 - Member

Not two years later!

Posted 3 months ago #
Matt24k - Member

Yes you do get a cooling off period but after 2 years you will be frozen out rather than cooled off
The OP wanted the security of a fix which this time has not been as good a deal as base plus 2%. What he needed was the security of a Fixed Rate with the potential interest saving of a Tracker. This is called a Capped mortgage but not all lenders offer them.
Now if the OP can prove that his lender offered such a product 2 years ago, but not to him, he could argue that he was a best misinformed and potentially missold.

Posted 3 months ago #
ScottChegg - Member

we wanted the security against possible rises

Well, you got that. Money well spent, then.
That's not small print, that change was in the financial news when the interest rates tanked. It was not a secret.

What is more astonishing is that you signed up for a 'deal' that was worse than the one you were on and you didn't ask what was going to happen once the deal expired.

It's like buying a sofa from DFS because it's 'free for a year'

Posted 3 months ago #
pjm84 - Member

I jumped onto a life time tracker mortgage in November 2008. At the time it was 0.72% above base. I managed to get on at 0.84% above base but the Advisor was strongly suggesting that I went for a 2yr fixed "deal".

I ended up having to sign a waiver saying I was offered advice but didn't proceed with the advice offered. I told them I'll happily sign anything.

Posted 3 months ago #
Imabigkidnow - Member

5 years ago when we brought our 1st property it was on a 2 year fixed with Nationwide.
Dropped to the frankly great rate that is their BMR

Moved last year from 1 bed flat to 3 bed house .. ported the Nationwide BMR mortgage across and just topped it up with a secondary mortgage also thru them (5 year fixed to hedge our bets). No one else could get anything close to matching the combined monthly payment

We put extra into the higher rate 5 year fixed whenever we can; well at least within their fixed rate overpayment guidelines anyway which we're never anywhere near.

The BMR part is still fully flexible.

Posted 3 months ago #
scaredypants - Member

don't you get a cooling-off period with financial products ?

Posted 3 months ago #
project - Member

Santander eh

Posted 3 months ago #
spooky_b329 - Member

What is more astonishing is that you signed up for a 'deal' that was worse than the one you were on and you didn't ask what was going to happen once the deal expired.

We went from a 5.6% fixed (that was due to finish the following month) to a 3.99% fixed. What we didn't notice was the change in wording from BMR to SVR...we didn't ask as we didn't realise the significance. Was a bit overwhelmed with numbers at the time as we had discussed several options with the guy, and we'd actually gone in to discuss 'topping up' the mortgage if we wanted to move, when he mentioned that we could change our fixed rate early we ended up doing that at the same time.

Posted 3 months ago #
pjm84 - Member

Not quite. You went from 5.6% to the option of 2.5% but chose to go to 3.99% for piece of mind. Paid a fee as well I guess for the benefit.

I had a work colleague in Jan 2009 whose "deal" was coming to an end and he fixed at 5.6% in feb 2009 for a 3yr term and paid ££££ . I advised him to go onto the SVR, which was cheaper and cost nothing, but he wanted piece of mind. His deal has now come to an end.

Posted 3 months ago #
GJP - Member

Another happy Nationwide customer here. 2.5% for god know how many years now, no fee, no redemption penalties

Posted 3 months ago #
ScottChegg - Member

We went from ... What we didn't notice was the change in wording from BMR to SVR...we didn't ask as we didn't realise the significance...Was a bit overwhelmed with numbers at the time...

Ow. It always pays to walk away and look and look and look again. Or to ask so many questions the guy throws you out.

It's been an expensive lesson for you. I bet you won't do that again.

Posted 3 months ago #
MRanger156 - Member

I'm about to get my first mortgage and currently think 5 year fixed will give me security at a rate of 4.15%. Good or bad idea?

Posted 3 months ago #
Pieface - Member

Our 5 yr fix came to an end with Nationwide a xmas and are sticking with their BMR until we can find a buyer. Our new mortgage will not be with Nationwide as their rates aren't competitive.

Posted 3 months ago #
stever - Member

We're on some ridiculous Base Rate plus 20p deal. I'm not ringing them or anything and always creep past their branches with a hood up

Posted 3 months ago #
FunkyDunc - Member

"Good or bad idea?"

Who knows.... I think I'm currently paying about 2.2% on a tracker with no tie in, no fees, no redemption.

Swings and roundabouts - I'll be paying alot less than you until rates go up, but then will a be able to get a fixed rate as cheap as you have once rates go up which costs more over the 5 years is anyones guess, but rates dont look like rising soon.

Having said that when I posted about a year ago, folk on here said that rates would be up within a few months... which didnt happen I

Posted 3 months ago #
phil.w - Member

Our new mortgage will not be with Nationwide as their rates aren't competitive.

Really, i got a DIP from them yesterday for 2.69% over base rate on a tracker. thought that sounded good, so what am i missing (who's better)?

Posted 3 months ago #
FunkyDunc - Member

HSBC have been doing some very good deals, but not sure if they are still available.

Posted 3 months ago #
brassneck - Member

Our 5 yr fix came to an end with Nationwide a xmas and are sticking with their BMR until we can find a buyer. Our new mortgage will not be with Nationwide as their rates aren't competitive.

I'm suddenly quite excited - my 5 year fixed with Nationwide ends in October, so maybe I'll get to go to BMR too. I was going to jump ship to First Direct but I'll hang fire now.

Posted 3 months ago #
vinnyeh - Member

Nationwide have spent most of the last few years trying to tempt us, and presumably most of their other customers, into signing up to one of their 'New Deals'.

On this years annual mortgage statement the accompanying letter told us how they are proud that they put the customers' needs first, and as a 'result you are enjoying the benefits of our low Base Mortgage Rate' with their guarantees blah blah.... the same rate that is no longer available, and that they would be delighted to get us off in any way they can.

Posted 3 months ago #
igm - Member

Base rate plus 0.34 for the life of the mortgage from the Nationwide. Collared at 2.34 at the moment but hey it's a deal.

And I can port it to a new property too.

Posted 3 months ago #
ScottChegg - Member

Some inexplicable Nationwide bashing there. As always, if teh interest rates fly up, the BMR won't be quite the deal it is now. (2% above BoE rate). Only you know if it works for you; if you don't have the wit to find out, you shouldn't have responsibilty for you own finances.

What's going to happen with interest rates? Everyone can guess, but no-one knows.

Our new mortgage will not be with Nationwide as their rates aren't competitive.

What's better than 2.5%? As mentioned above, you can carry that across to your new property and top up with one of their deals. If you can find a better rate than that, let's all have some!

Posted 3 months ago #
thekingisdead - Member

Mervyn King hinted yesterday that rates won't rise until 2014 (see torygraph)
I'll be staying on my tracker for now.

Posted 3 months ago #