Mortgage reservation fees

benoz2000

Recently my tracker mortgage with Nationwide came to the end of its two year period and was to revert to the standard variable rate.

Looking around for alternatives I found that renewing the term with Nationwide would be quick and at a very competitive rate. In staying with Nationwide I benefited from not having to pay the £99 administration fee associated with repaying the mortgage.

However in taking out the "new" mortgage I was obliged to pay the £599 reservation fee. In a heated discussion with Nationwide I was informed that this is a charge that is incurred on the interbank borrowing and passed on at cost to the customer.

As this is not a "new" mortgage and simply filling in a few forms, does anyone know whether the building society is truly passing on its costs or finding yet another way to profit from upfront costs?

Any help would be appreciated

TangentMan

Probably both. The price of the product is composed of its fees and its rate. Much like some services have a one off initial set-up fee and a monthly charge afterwards.

Nationwide will incur costs in dealing with your application - whether it be people, money costs, premise, advertising etc. They will also want to make some profit (whilst they are a mutual they aren't a charity).

If you feel that the fee is excessive you should look around, there are plently of fee free deals around at the moment.

payless

Nationwide also have a range of producs that you can go to , that does not charge a fee- just at higher rates

NOTE NW fixed rates changing from end of business Monday 8th

Woby_Tide

payless wrote:

Nationwide also have a range of producs that you can go to , that does not charge a fee- just at higher rates

NOTE NW fixed rates changing from end of business Monday 8th

up or down?!

That's quick for them, only amended them mid-April to current rates

payless

Up and some of the fees also increased

Yes last change was 13th April, and they normally do last a little longer - but to be honest this was rumoured in the week ( think we were luckly to get advance notice this time)

teecee90

When comparing mortgages you should always include the arrangements fees. Almost all lenders add these fees, some are higher than others. Just add the fees to the total payments due over the "lock in" period to determine the cheapest product.

Woby_Tide

payless wrote:

Up and some of the fees also increased

Yes last change was 13th April, and they normally do last a little longer - but to be honest this was rumoured in the week ( think we were luckly to get advance notice this time)

do you have anymore details or know when it is set to be released, their media centre doesn't have the update yet. Just working on potential new mortgages so could do with any fee or rate changes to factor in on calculations

TangentMan

Swap rates are going up so i would expect their fixed rates to go up.

Depending on their pricing policy they may move just the rate or the fee, or both!