Northern Rock Flexible Mortgages - change of terms

scarlott

I was made redundant in the summer - I used my redundancy package and all my savings to overpay my mortgage - I told NR that I was no longer working and would only overpay on the understanding that I could reborrow the money. However I recently tried to get the money back they have told me they have changed the terms and conditions and that I cannot have it back. Has anyone had the same issue?

sconieroany

Like yourself, I am very unhappy at this change in terms, as like many people here, I have been overpaying for years, this gave me the flexibility to draw my own money back for any reason I saw fit, but now you have to jump through lots of hoops to do so.

I think it's shocking that, we were all told that we could overpay and get the money back as we liked, just to be told now we can't !, we are being treated like children at sweety shop.

I would like Martin to address this on his site, as Northern Rock are holding it's customers to ranrom due to it's own financial foolishness, if they are changing the terms, then it's customers should be able to rip up the contract and walk away.

dunstonh

A lot of flexible mortgages have terms which allow them to reduce the amount you can withdraw. That only tends to happen when house prices drop. In this case, lending criteria has sensibly been tightened up but its caught a few people out in the process.

Overpaying the mortgage means you are taking a risk that you cannot get the money back if you need it. So, you shouldnt use funds that you may need to draw upon later. That has always been the case and nothing has changed in that respect.

koexelek

sconieroany wrote: »

if they are changing the terms, then it's customers should be able to rip up the contract and walk away.

agreed.

They were always selling this facility when pushing their products.

tiff

Have to agree too, the product is now not as flexible as it was when sold.

sconieroany

dunstonh wrote: »

A lot of flexible mortgages have terms which allow them to reduce the amount you can withdraw. That only tends to happen when house prices drop. In this case, lending criteria has sensibly been tightened up but its caught a few people out in the process.

Overpaying the mortgage means you are taking a risk that you cannot get the money back if you need it. So, you shouldnt use funds that you may need to draw upon later. That has always been the case and nothing has changed in that respect.

I understand what you are saying, but like most financial products out there (like endowments) customers are sold on all the wonderfull, flexible aspects of the mortgage, none of the minus points are in big bold letters up front, but hidden away amongst a mountail of legal jargon in the smallest font they can find.

Although I am not desperate for the cash, a lot of hard working motgage holders out there, may now find themselves in a position that they need some cash back, to see them through these tough times, and that's exactly the reason most people put away the exta overpayments in the first place.

I would hate to think that if I now needed "My Money" back to say....fund an urgent operation for a family member, that I would now have to phone Northern Rock and plead for my money, from some junior telephone custom agent.

No, it's wrong, just plain wrong.

scarlott

well in my case the ltv on the property is fine. even if the property has dropped 15% in value in the last 9 months, i still have 30% equity left in it. however what annoys me is that i explained my financial situation to them i.e. that i wasn't working, and told them that if i couldn't get the money back, i wouldn't bother putting it in. and they told me it was fine. so i am now in a situation where my savings would have paid my mortgage for years, whereas now i only have a month or two left in cash to pay - despite that i've overpaid by 30% of the original mortgage size.