Current Lender Not Allowing Me To Transfer To Lower Interest Rate

pixiepie99

This is mad!

It's people living off their savings who have been screwed over, not people who have gone on a fixed rate mortgage (and I am one of those people on a fixed rate mortgage).

Opting for a fixed rate isn't prudent, it just means you can budget easily for the length of time you're on that rate. It's actually a gamble on the fact that rates will stay the same or go up. If they go down you feel hard done by but it was your choice!

hostman

Andy_L wrote: »

Would you be complaining if interest rates had soared?

No, because they would have soared to decrease rampant inflation, inflation which would have increased my wages and in effect reduced the burden (not the principle sum of course) of the mortgage. So the situation is some what different. Very high rates and very high inflation benefits borrowers. Very low rates in my view do not, as it leads to another bubble in 15-20 years.

We may very well reach that stage, as the Government presses ahead with printing money, but who knows when we'll see it.

hostman

pixiepie99 wrote: »

.

Opting for a fixed rate isn't prudent, it just means you can budget easily for the length of time you're on that rate. It's actually a gamble on the fact that rates will stay the same or go up. If they go down you feel hard done by but it was your choice!

"it just means you can budget easily"

Er. That's being prudent.

Anon

ben_and_elly wrote: »

... they told me they are no longer allowing customers to come out of rates early as they will lose money!!

From reading other threads, I understand that they will let you out early if you are going to another mortgage provider (so long as you pay the exit fee, which is covered by your contract). What they will not do is let you switch to one of their other products like a number of provider (including First Direct, who indicate that their lowest rate is not available to existing customers and Nationwide say that the BMR is available to people at the end of their term, no people opting out early). Where this is perhaps unusual, in the current market turmoil, is that people are enquiring about going onto the SVR whereas in the past this was generally much more expensive than fixed rate deals and we have been conditioned/pursuaded/trained (manipulated :rolleyes:) to believe that fixed rates were the best deal - which clearly they are in a rising market, or where you want to be sure what you are going to spend no matter what is happening in the market, but have caught a few of us out in the current market.

Anon

ben_and_elly

I have read the responses and do agree with lots of you. I totally understood that by taking a fixed rate mortgage that it was my choice and if rates went down, then at least I knew where I stood. I also was more comfortable knowing that my mortgage payments would not change, so could budget on that side.

However, this was before the current climate and what we had not expected, was for the huge rise in other outgoings - petrol/utility bills/council taxes etc. So, when we realised that we could be better off by £120 approx per month, after penalties, who wouldn't want to take that chance and transfer to a different rate.

It would have been a nice change to be able to do a food shop, without
being on such a tight budget - letting the kids have "yummy treats!"

In addition, I did telephone the Ombudsman and they said that they have had LOADS of complaints in the last few days regarding this problem. There are a number lenders blocking transfer to a lower rate for existing customers. They also said that it was it unfair, especially in view of current climate and are taking up any complaints and forwarding letters on to relevant lenders. They have up to 8 weeks to respond, so it will be interesting to see the outcome.

I still don;t understand those of you who say basically "tough. It was our choice to opt for Fixed Rate" when at the time of applying, we were under the impression that we could opt out, as long as redemption penalties were paid. We did not realise this condition could be changed by the lender at any time, which is what has happened.

Good luck to those of you who want to lower your rates and are not blocked by your current lender.

Thank you also to all of your responses.

Robert_Sterling_3

ben_and_elly wrote: »

How is this fair - I could be saving £120 per month and paying them a hefty £2600 early redemption penalty but they aren't allowing me to switch. Is this fair - can they do this?

It is fair. They can't put your rate up if the wish to. You cannot get the rate reduced. What could be fairer.

koexelek

Anon wrote: »

Where this is perhaps unusual, in the current market turmoil, is that people are enquiring about going onto the SVR whereas in the past this was generally much more expensive than fixed rate deals

Things have turned on their head, In the past the SVR was a rubbish high rate that no one wanted to end up on.
These days, the SVR is so good a deal, you have to " earn the right" to have it, by completing a fixed or tracker scheme with a lender first.

ben_and_elly

Robert_Sterling wrote: »

It is fair. They can't put your rate up if the wish to. You cannot get the rate reduced. What could be fairer.

That's the whole point in redemption penalties though wasn't it? To enable to reduce rates?

Rolandtheroadie

Get another provider, pay the exit fees, get over it. Surely you wont complain about it and then stay with them?
Redemption penalties are to protect the banks. They give you a fixed interest rate, if they drop you'd leave so they have them to protect themselves against this.

What a nation of whingers we've become.

feisty1

Nationwide SVR is not a product option, it is the rate you default to when you come to the end of yr existing deal, you then have the choice to stay on the svr, choose another product or move lenders.