Nationwide to enforce floor / collar at 2%

morrisoscar

morrisoscar wrote: »

Thanks Ian,

Called into my local NW branch with my paper work today to be told the 2% floor does apply to me. When I asked if this was a change in the terms and conditions she said "yes". When I asked if they could do that she said "yes because we have announced it on our web site, however you can ring head office if you wish but we have got to look after savers and you already have a good deal as it is." I asked if I could pay the mortgage off without penalties because of this change to the T&C's she said "no penalties still apply until the end of the deal term."

Rang NW head office and asked them, kept me on hold quite a long time then came back saying there appears to be no floor on my deal (the first he had come across). So I should get the reduction, he also said I was correct in thinking they couldn't just change the terms and conditions by announcement on their web site.

If you have an old NW tracker like me it may well be worth a call. I think they also need to tell the staff in my local branch!

Copy of a email received from NW today, three different answers to my one question.

As a mutual it is important that we act in the interests of our members as a whole. We have around 1.4 million borrowers and over 10 million savers.
We have done a huge amount to support many of our borrowers and we must now also ensure that we do our best to look after our savers. As a result, in order to balance the needs of borrowers and savers, the existing tracker floor will be enforced if base rate falls below 2%.
It will be applied at the rate of 2%, rather than 2.75%, as a temporary concession. This means that if the base rate falls below 2%, the mortgage rate will not fall below the level they are currently being charged. Tracker rates will remain at 2% (plus or minus the differential of each tracker product) until the base rate rises back above 2%.
A tracker floor of 2.75% is already stated in your mortgage conditions. This new, temporary floor of 2% is advantageous to all Nationwide's existing tracker customers as it is 0.75% lower than the 2.75% floor which Nationwide are entitled to apply.

Answer 1. Local Branch Friday. Your T's&C's do not state a floor rate but we have changed them by announcing it on our web site.

Answer 2. Head Office on telephone Friday Local branch are wrong we can not change your T's&C's and they do not state a floor rate on your tracker. Therefore you will receive the latest rate cut,

Answer 3. Head Office email Sunday. A tracker floor of 2.75% is already stated in your mortgage conditions. This new, temporary floor of 2% is advantageous to all Nationwide's existing tracker customers as it is 0.75% lower than the 2.75% floor which Nationwide are entitled to apply.

What a professional outfit, :rotfl: not sure what to do now as my copy of the terms and conditions must be different to their copy, or they did not read them. Should I start a formal complaint with them?

Ian_Griffiths_Halifax

morrisoscar wrote: »

Answer 3. Head Office email Sunday. A tracker floor of 2.75% is already stated in your mortgage conditions. This new, temporary floor of 2% is advantageous to all Nationwide's existing tracker customers as it is 0.75% lower than the 2.75% floor which Nationwide are entitled to apply.

What a professional outfit, :rotfl: not sure what to do now as my copy of the terms and conditions must be different to their copy, or they did not read them. Should I start a formal complaint with them?

Reply to the email and refer to their statement that there is a 2.75% tracker floor in your mortgage conditions. Ask them to send you a copy of your KFI and Mortgage Offer Letter with the relevant sentences highlighted as you cannot find them.

morrisoscar

Ian_Griffiths_Halifax wrote: »

Reply to the email and refer to their statement that there is a 2.75% tracker floor in your mortgage conditions. Ask them to send you a copy of your KFI and Mortgage Offer Letter with the relevant sentences highlighted as you cannot find them.

Thanks Ian,
:T
Will do.

morrisoscar

Ian_Griffiths_Halifax wrote: »

Your mortgage was offered before the FSA introduced the KFI and the corresponding version of the Offer Letter.
I

My Tracker started Oct 2004, does anybody know the date FSA introduced the KFI.

Thanks.

Ian_Griffiths_Halifax

morrisoscar wrote: »

My Tracker started Oct 2004, does anybody know the date FSA introduced the KFI.

Thanks.

1st November 2004.

morrisoscar

Ian_Griffiths_Halifax wrote: »

1st November 2004.

Thanks Ian,
Just in under the wire.:j

Reply from NW will be interesting.

morrisoscar

Ian_Griffiths_Halifax wrote: »

Reply to the email and refer to their statement that there is a 2.75% tracker floor in your mortgage conditions. Ask them to send you a copy of your KFI and Mortgage Offer Letter with the relevant sentences highlighted as you cannot find them.

Thanks Ian,

It worked:T received a telephone call from Nationwide today. They have checked the paperwork and no floor applies to my tracker mortgage product. My rate will reduce to 1.74% from the 1 Feb and any further cuts in the base rate will be passed on. So much for their statement that a floor rate is applicable to all their tracker products.

My advice for what it's worth would be if you have a Nationwide tracker which predates 1 Nov 2004 challenge the floor rate and don't take their first answer.

luckyfool

sbracken wrote: »

While I am glad that the 2.75% collar was waived, I am annoyed that there are now two collars. Loyal customers like myself have a collar of 2%, while a Johnny-come-lately who signed up for a tracker in December will have a collar of 1%. Thanks for nothing.

eh? Maybe you would like to swap products with one of the Johnny Come Latelies if you are unhappy? The products with 1% collars have margins at about 2.5% above base rate, i.e. once they hit the collar the minimum rate they can pay will be around 3.5% and it will start going back up again much sooner than people on the old collar.

Products on the old collar at 2% are often on margins of 0.2 - 0.5% so the minimum rate they are collared at is about 2.2 - 2.5%.

Ian_Griffiths_Halifax

morrisoscar wrote: »

Thanks Ian,

It worked:T received a telephone call from Nationwide today. They have checked the paperwork and no floor applies to my tracker mortgage product. My rate will reduce to 1.74% from the 1 Feb and any further cuts in the base rate will be passed on. So much for their statement that a floor rate is applicable to all their tracker products.

My advice for what it's worth would be if you have a Nationwide tracker which predates 1 Nov 2004 challenge the floor rate and don't take their first answer.

Good news :beer:

I wonder how many other Nationwide customers out there, are simply sitting back and not questioning their Interest Rate.

emmatthew

I'm in a similar Boat.
I got my mortgage offer in July 2004 and took it out in Oct 2004 (5 year Tracker 0.24% above base)
I rang them nearly 2 weeks ago, I was told that all nationwide trackers had a collar. I told him that I had all the paperwork I had ever been sent from them relating to my mortgage in front of me with no mention of the collar. He said well I can access all the correspondence electronically and would tell me where I could find it. After a few minutes he said "its not looking very promising" I responded "What for you, it sounds promising for me" He then told me that he would have to get a supervisor to manually pull out my file and they would write to me in about 7-10 days but certainly before 1st Feb to confirm either way.
I am still eagerly awaiting the letter from them.