Can they do this!?!?

amii91213

I have a fixed rate deal with Nationwide which still has about 4 years to run on it and (by current standards) a wacking great interest rate!
When I took this mortgage out it had penalty fees of about 3% for early repayment.
I contacted Nationwide recently to ask them for details of how much I would have to pay to release this mortgage and sign up to a new fixed rate deal with them at current prices because by my crude maths I would actually save money by doing this.
They refuse to supply me this information and said that in January 2009 (over a year after I signed my fixed rate deal) they changed their rules and now noone with one of their fixed rate products is allowed to repay them early (except in the last 3 months of the product when you can switch to another of their products wihout penalty)
It is very obvious why they have made this change - but is it legal or have do they have to honour the original contract they had with me?
Any advice would be well received!!!

p00hsticks

Are you sure it's the 'repaying them early' bit that they don't allow (I don't see how they could prevent this), rather than 'repaying it early and then moving to a better fixed rate deal with us' ?

Farquart_2

If you are looking to change I would consult a whole of market mortgage broker as you may find you could get a much better deal by going to a differrent lender

p00hsticks

This link from a newspaper article at the time seems to suggest that - as I thought - it's not the 'repaying the fixed rate early' that they won't allow, it's the 'then moving onto another loan with us'

http://www.guardian.co.uk/money/2009/mar/13/nationwide-remortgage-early-redemption-charge

Mrs_Bumble

That is their current stance if you have a product deal with them at present you cannot switch to another deal regardless of whether you are willing to pay the ERC and the new arrangement fees.

Doesn't mean that you can't look for another lender if you can find an interest rate that is competitive enough to warrant the change bearing in mind the legal fees, valuation fees and arrangement fees of a new mortgage.