Nationwide won't let me come out of fixed

eamon

Would you be asking to exit the fixed rate if the SVR was higher than your current fixed rate? Didn't think so! You are not the only one with this issue. But this is/was the gamble that you took.

SmileyG_2

eamon wrote: »

Would you be asking to exit the fixed rate if the SVR was higher than your current fixed rate? Didn't think so! You are not the only one with this issue. But this is/was the gamble that you took.

Eamon is right.

I took out a 5 year fixed rate at 5.18% almost 2 and a half years ago. In return for knowing what my monthly payments were going to be for 5 years, I agreed to pay this amount to Nationwide whatever the base rate was going to be.

When rates head the other way, be grateful of your fixed rate and the stability it provides, but acknowledge that fixing your mortgage is never a one way bet.

SmileyG

koexelek

eamon wrote: »

Would you be asking to exit the fixed rate if the SVR was higher than your current fixed rate? Didn't think so! You are not the only one with this issue. But this is/was the gamble that you took.

Exactly. If that were the case and Nationwide decided to abandon their fixed rates and put their borrowers on variable, there would be uproar

Markyboy1972

Let's go back to the original post for a second. And let's stop reading posts from people who say 'you took the gamble and you lost, so tough!'.

When the contract started the lender was happy for customer to pay an ERC and switch to SVR - this is a recent change to policy which penalises customers due to market conditions. So the 'gamble' (if you have to call it that) was made when the business clearly set out how it would treat customers - this treatment of customers has since changed, so it was not a fair gamble.

I am making an assumption that you are prepared to pay the ERC - you should as this part of the agreement you accepted - and you should be able to pay the ERC and switch to the SVR. This was something that was freely available when you took out the mortgage.

Put simply, you are prepared to honour your part of the agreement by paying the ERC and they should honour their part by allowing conversion to SVR.

And as for the arguement about what we as customers would want if SVR was going through the roof - not a strong arguement, in fact useless - if the SVR was going up I am sure lenders would not have introduced the 'you cannot switch to SVR' policy. This lack of consistency and fairness towards both parties is what makes it wrong.

Markyboy1972

eamon wrote: »

Would you be asking to exit the fixed rate if the SVR was higher than your current fixed rate? Didn't think so! You are not the only one with this issue. But this is/was the gamble that you took.

And this is what makes it unfair ... lenders have only introduced this approach/rule due to changing market conditions. And I agree they are a business and not a charity ... so,

At the time the agreement was taken out and agreed, both parties would have set out the terms of the agreement and it is reasonable for a customer who was aware of how the lender reacted to conversion to SVR requests to accept the agreement and expect this to still be available in the future - as long as he/she is happy to pay the ERC.

As other posts have commented the ERC is designed to cover ANY costs the lender incurrs when a fixed rate deal is ended early - as the potential loss to the lender is lower as you move through the fixed rate period, the amount of ERC normally reduces year on year. So, if you are prepared to pay the ERC and so offset any loss to the lender/or cover their expected profit, conversion to SVR should be allowed!

Markyboy1972

koexelek wrote: »

Exactly. If that were the case and Nationwide decided to abandon their fixed rates and put their borrowers on variable, there would be uproar

A terrible post and not a direct response to the issue being raise ... in my opinion.

Nationwide could not and would not do this as their is a contract in place. The contract between both parties sets out what the other can expect and must do. If a customer wants to come off the fixed rate they must pay ERC. If they pay the ERC they should be on the SVR - this is the rate (not a product as some lenders have recently redefined it either!) that formed the basis of product developments/marketing and, until recently, was the default rate if you took no action after your fixed rate ended - netting many lenders many millions of pounds during this period!

Comyface

Sorry to be the bearer of bad news, but Halifax are now saying the same thing - you can only transfer onto their Standard Variable Rate at the end of a deal, not before.

Wonder how many other lenders will adopt this stance?

Markyboy1972

C&G, part of Lloyds Banking Group as are HLOSS, sorry HBOS, are also saying the same thing. They will not enable conversion to SVR to customers willing to pay ERC.

I have a C&G mortgage and so am complaining - wrote a letter 5 weeks ago. Spoke to a Complaint Handler today who said they have 'not yet decided on their strategy when responding to complaints and the position is currently being considered by Senior Management'.

I can expect a reply in two/three weeks time.

I promise to keep you posted and, if successful, will happily PM you a copy of the letter that I have used.

Fingers crossed and good luck to all.

Ms_Brush

Been told the same by HSBC. I have 15 months left on a 3 year fix, but not viable to remortgage under current market conditions.

HSBC wont allow anyone to drop onto SVR, which is no longer available to anyone except borrows whose fixed rate has ended, and the only options for new borrowers is a fairly high fixed rate or 3% above base for those fortunate enough to have a low LTV. Mis out on that as generally prices have dropped 15%, dumping me out of that criteria - along with thousands of others, no doubt!

Bottom line is, they want the fixed rate (captured audience) people where they are, thats where they are making their money at the moment,,,

opinions4u

Shiraz123 wrote: »

Just rang nw, asked to move onto base rate and pay the fee applicable becuase it's going to save me. Their answer "we are not allowing members to come out of their fixed rates at the moment". Are they allowed to do this, I am quite happy to pay the fee!

Unless you can find something in your original terms and conditions that says you can do this, you don't have a leg to stand on.

Would they allow you to pay the fee and transfer to an alternative product (paying the additional fee for that too)?

When I said "presumably I can end my mortgage with you and go to someone else's base rate?" the answer "yes that's the only way you can do it".

I doubt you will find any other lender that will offer you the SVR at the start of the mortgage.

Bonkers they are going to lose customers.

Has it crossed your mind that they need to manage down the size of their mortgage book? They don't need as many mortgage customers because they can't raise the savings balances they need at a sensible price and they can't raise the money easily on the wholesale markets because, if you hadn't noticed, there's a credit crunch problem flying around the planet.