Mortgage Reservation Fees

craiguito

Sorry if this is repeating a previous thread (but I can't see one!)

My Nationwide mortgage deal came to an end in November - so in October I originally decided to go on to their fixed rate. A £299 reservation fee was charged. Within the cooling-off period I decided to go on to their tracker rate (thank goodness), but on my mortgage statement, I noticed I was charged another reservation fee (£299)! Can they do this, when I switched during the cooling-off period? They didn't mention it when I arranged it on the phone.. or will it be in very small print somehwere?

Help....

koexelek

Yes they can.

Nationwide are a very harsh lender in this area.

Where as some other lenders will let you swap to a better rate and only pay one fee, Nationwide charge you as soon as you reserve a product, regardless of whether you take it up or not. If you want to swap, they charge you again .

craiguito

Ooh, the thieves!

Thanks for the response

Robert_Sterling_3

Could you define "the cooling off period" for me.

craiguito

You have 14 days where you're allowed to change your mind and switch to another product. Although, if they're going to charge you anyway, why bother having it!

Robert_Sterling_3

That was exactly why I asked you what the cooling off period was.
I can now see how it works.

You sign up for a mortgage and pay a fee.
The Nationwide guarantees that they will reserve funds for you to borrow at the agreed terms.
That is your agreement.

However there is a cooling off period, for you not for them, in which you can cancel that mortgage agreement, which is nice for you, in which case they are able to retain the fee which is nice for them.

As a result of this when you consider not taking the original mortgage and taking another mortgage instead you will need to take into consideration the new arrangement fee when deciding whether to swap to the new mortgage or stick with the original one.

This all seems OK to me. If you could do better elsewhere then by all means go elsewhere for your mortgage.