Northern Rock...downright sneaky tactic.

DaftMule

I was going to post this in the Northern Rock or ERC sticky but they are getting so long now that I thought it may warrant a new post just so people get a heads up. (Apologies if it has already been highlighted elsewhere therefore)

We are about to come to the end of our 3 year fixed rate (at 4.79%) with NR and we are currently arranging our move to another provider. We called NR to find out exactly when the fixed rate ends and was informed that we are going to have to repay them £1000 even if we change providers at the end of our fixed term :mad:

The reason....well, they were offering £1000 cash back when we took out the mortgage. Aparently, whilst the early redemption period is 3 years, the period attached to the cash-back is 3.5 years so redemption before the 3.5 years is up means we have to pay the cash-back amount back to them.

Ok, ok, I'm sure that the information was in the small print somewhere but I can't remember it being made clear to us when we took out the mortgage.

I really do feel that it's a bit of a underhanded, sneaky tactic from Norther Rock.

minimike2

Its not underhand or sneaky.

Do a forum search for "Help with costs".

Its been asked many times.

_Andy_

Why is it 'sneaky'? It would have been on your KFI and mortgage offer. If you didn't choose to read the document about the most important financial decision of your life then you can't really blame anyone else.

DaftMule

I guess we shall have to agree to disagree.

Why do I think it's sneaky...well, given the amount of information you have to digest and try to understand when you are, as you put it, making one of the most important financial decisions of your life, I doubt I am the only person who would be or has been caught out by such a detail. Trying to work out the implications of each aspect in the small print of a mortgage deal is pretty difficult for the ley person.

It's a neat trick I must admit....and whilst there is the chance that the interest rates would dictate that someone may not move mortgages as soon as the fixed rate comes to an end, I'm willing to bet that the the odds lie in the favour of NR overall and so they can expect to get the cash-back they give out returned to them more often than not....after all, there's no such things as free money eh!

minimike2

You must have had to make that decision when you took the mortgage out though....they didnt just default you onto that option. You will have had to make the decision, or will have had to had it recommended to you, in which case the reasons why would have been outlined in your record of suitability AND kfi AND mortgage offer.

happybroker

I am guessing you arranged this direct with the Rock, a broker would (I hope) have made this more clear as part of the advice process. It would have been pretty unlikely you would have received an advice and recommendation service going direct to lender.

If not, apologies, it certainly should have been made clear when the broker went through the small print with you.

_Andy_

DaftMule wrote: »

Trying to work out the implications of each aspect in the small print of a mortgage deal is pretty difficult for the ley person.

It's not in the 'small print' - it's in the KFI in the same font size as all the other information.

shamac

Funny how its all the mortgage advisors that think this is ok isn't it!

I agree with you it is a nasty snidey way to get your remortgage business. If you don't read every single word of the 1200 bits of paper you are given when in the middle of moving house-trying to juggle money/solicitors/surveyors/work/kids/chains/completion dates/aging parents/life- it doesn't make you stupid or financially incompetent just human. The belittling of someone because they are giving a heads up to the other "humans" on here who might make the odd financial mistake is not inthe sprit of things now is it???

DaftMule

Blimey...being bombarded by mortgage advisers and their abbreviations here! What's a KFI?....ah...google is your friend. Key Facts Illustration....

Starting to feel sorry I posted this as it seems I am wrong.

Anyway, we got the mortgage through an independent advisor. I can't remember the difference between the term of the early redemption and the term attached to the cash-back being highlighted as a potential issue...but I could be wrong.

Let's leave it at that shall we. What is not altered is the fact that I now have to come up with a £1000.....deep joy.

DaftMule

shamac wrote: »

Funny how its all the mortgage advisors that think this is ok isn't it!

I agree with you it is a nasty snidey way to get your remortgage business. If you don't read every single word of the 1200 bits of paper you are given when in the middle of moving house-trying to juggle money/solicitors/surveyors/work/kids/chains/completion dates/aging parents/life- it doesn't make you stupid or financially incompetent just human. The belittling of someone because they are giving a heads up to the other "humans" on here who might make the odd financial mistake is not inthe sprit of things now is it???

Thank you :beer:

lethal0r

course its a little sneaky. they know a certain % of people wont bother to read the KFI in its entirety and its just for those i.e. you.