MSE News: Beware mortgage lenders' hard-sell rate trap

Former_MSE_Guy
Former_MSE_Guy Posts: 1,650 Forumite
I've been Money Tipped! Newshound! Chutzpah Haggler
edited 19 January 2010 at 6:55PM in Mortgages & endowments
This is the discussion thread for the following MSE News Story:

"Homeowners approaching the end of an introductory mortgage deal have been warned to beware lenders' hard-sell attempts to flog them a new product ..."

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Comments

  • VIGILANT22
    VIGILANT22 Posts: 2,516 Forumite
    Thanks for the article..
  • All markets need some people to be less savvy and pay more so that others can benefit from better deals.

    For example, a car dealership may need to sell 10 x cars at £10K each in a month. If they can sell 9 of them for £10,100 to 'richer' customers they can discount the final one by £900 for a better haggler.

    What astounds me is that people borrow many times their annual income and don't know the key facts of the deal.

    Nationwide, like other lenders, need to balance the books. Their BMR is too competitive (it was never expected to fall to 2.5%) and if they are to avoid going out of business they need to get as many people as possible off the BMR deals. Alternatively, they may be forced to change the terms of the mortgages for everybody and that wouldn't be popular.

    I'm not saying that they should con people but I don't blame them for targeting new deals to those who they would like to move. After all, Honda don't send me a flyer offering the latest Honda Accord with a note saying that keeping my old Honda Civic is cheaper.

    We, as customers, need to take responsibility for our own decisions. If we all wish to pay the fair price there will be no room for anyone to gain a bargain.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • VIGILANT22
    VIGILANT22 Posts: 2,516 Forumite
    I guess this is the benefit if you have an adviser as they're obliged to discuss all your options
  • She didn't know the base rate was 0.5%?! She shouldn't be allowed any kind of mortgage!
    I'm an Investment Manager. Any comments I make on this board should be not be construed as advice, and are for general information purposes only.
  • michaels
    michaels Posts: 27,993 Forumite
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    Do we really need to be warned that we should look for the best deal when spending 7k plus pa?
    I think....
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    MSE_Guy wrote: »
    This is the discussion thread for the following MSE News Story:

    "Homeowners approaching the end of an introductory mortgage deal have been warned to beware lenders' hard-sell attempts to flog them a new product ..."


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    The article's title is somewhat misleading. As hardly a hard sell. :rolleyes:
  • wizk1
    wizk1 Posts: 911 Forumite
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    Thrugelmir wrote: »
    The article's title is somewhat misleading. As hardly a hard sell. :rolleyes:
    "You need to begin the switching process one month before your existing rate expires."

    That sounds like hard-sell talk to me.
  • nomoneytoday
    nomoneytoday Posts: 4,866 Forumite
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    It's not Nationwide's job to do all the research for customers.
    They are a business, all be it a Mutual Society rather than a plc, not a charity :)
  • VIGILANT22
    VIGILANT22 Posts: 2,516 Forumite
    wizk1 wrote: »
    "You need to begin the switching process one month before your existing rate expires."

    That sounds like hard-sell talk to me.

    It is the process if you want to go onto a new rate the following month once your old one expires.
  • It's a tough situation. They have really suffered from the extended period of low rates and the changes in the funding environment since they entered into the SVR=BR+2% promise. They need to get as many people off that SVR as possible. Personally, I'd rather have a fixed rate at say 3.79% than be on the SVR at even BR+2%, so if I was with Nationwide on one of these, I'd ask what the VERY best they can do is to get me off the old deal.

    The point is, it doesn't say what the deal was. If the new one was a fixed rate, this isn't necessarily a scam at all. There's not enough information, the only thing that's sure from the article is that the woman in question is a retard.
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