Nationwide won't let me pay the penalty and change products!

cj34

Hi,

Please help me !!

I have decided to pay the penalty and come out the fixed mortgage 6.4% with Nationwide to go on the tracker with them. But I have just called them to arrange it and they are now saying they have changed the rules and even if I pay the penalty they will not let me take on any other product, I am not allowed to take out thei other fixed at 4.4% or take out a tracker.
Are they allow to do this ???
If I had known this I would never have fixed with them in the first place!
Surely they cannot change the rules half way through my contract. Bascially I am stuck with my 6.4% rate unless I leave!?!

Please help, is this legal?

feisty1

what rules are they changing?

nick1977

I'm no expert, but I guess paying the fees to exit your product early, and applying for a new product are two separate things.
The penalties for exiting within the promotional period are probably for paying the mortgage off, not just for exiting the product.
So they would let you exit the product early, providing you were moving your mortgage to someone else or paying it off in full.
Is your LTV suitable for their current products?

Nick

cj34

My LTV is 75% which is good for the tracker, it says in my contract 'If you transfer to another product before the expiry date shown (2011) you will be charged an early repayment charge' but surely they should be able to offer me another deal ?

wife-spent-it-all

I have no idea about the legality of it or not, but if you do decide to leave them for another lender and you have been with them for a long time then you may want to consider your status for any windfall payout if they ever converted to a bank.

If your mortgage is the only account you have with the Nationwide and you haven't already signed-away your conversion rights, then i suggest that you create a nationwide savings account (one for each person named on the mortgage) before you close your mortgage otherwise you will lose any conversion rights you may have.

Ian

feisty1

cj34 wrote: »

My LTV is 75% which is good for the tracker, it says in my contract 'If you transfer to another product before the expiry date shown (2011) you will be charged an early repayment charge' but surely they should be able to offer me another deal ?

They aren't obligated to, just like you are not obligated to them to take on a new contract.

nick1977

cj34 wrote: »

it says in my contract 'If you transfer to another product before the expiry date shown (2011) you will be charged an early repayment charge'

Unfortunately that wording doesn't suggest they guarantee to allow you to swap.
I assume you have calculated how much you would have to pay to redeem early and the new product fee etc? How much do you think you will potentially save?
Also, if you are looking at paying early redemption, have you tried to get onto their SVR of 3.5% (from 1/2/09) which would be more attrative than a new tracker ATM.

Nick

feisty1

nick1977 wrote: »

Also, if you are looking at paying early redemption, have you tried to get onto their SVR of 3.5% (from 1/2/09) which would be more attrative than a new tracker ATM. Nick

SVR isn't a product, u can't choose to go on it, it is a default rate

cj34

Thanks Nick, but I had the same problem with that I originally decided to go on the SVR but they decided to stop anyone going on it unless their deal was coming to an end. Which is why I decided on the tracker I called up about 3 times to discuss it and no one said I couldn't do it until today.

My payments would half if I went on the tracker and I would be able to pay back the penalty with the difference within 3-4 months so well worth getting out of my deal!

nick1977

feisty1 wrote: »

SVR isn't a product, u can't choose to go on it, it is a default rate

Yep, but I didn't know if it was an option to go onto the default rate if you pay the early redemption charge for the product you are on. As the OP had been refused a new product it may have been another option.

cj34 wrote: »

My payments would half if I went on the tracker and I would be able to pay back the penalty with the difference within 3-4 months so well worth getting out of my deal!

Would be interested to know the figures! i.e. redemption charge, outstanding mortgage balance. Surprised you would make back all of the associated costs in 3 months with the current high base rate differentials in NW trackers

Nick

cj34

I would save £418 per month and my penalty is £1600.

I still not sure that it is ok for nationwide to not allow me to take on other products if I am willing to pay the penalty (when they are available to new customers) they have not informed me in writing, isn't there some loop hole where until they let me know in writing I should be able to change products?