Direct Debit Discount

amischiefmaker

Hi all, I just got a letter from the Skipton (whom bought the Scarborough BS and took on my mortgage deal) and it states that my interest rates are about to change, which ordinarily isn't a problem but they have imposed an extra charge from my original contract because I don't pay by direct debit ( I pay by standing order so I can pay extra when I want to). My original contract was a 1.75% discount off their SVR for the full term of the mortgage but the new rates have effectively added 0.25% because of the direct debit. Is this legal or do they have to honour my original deal and give me the 0.25% back?

VIGILANT22

Please note, our SVRs include a 0.25% discount for borrowers who pay by Direct Debit.

http://www.skipton.co.uk/mortgages/svr/questionsAndAnswers.aspx

dunstonh

Is this legal or do they have to honour my original deal and give me the 0.25% back?

It is legal. Standing orders cost more to administer for the lender and you are paying for the increased cost. You are basically not qualifying for the discount because you have chosen a more expensive method of payment.

dimbo61

so set up a direct debit and kep the 0.25% discount !
Is this the SVR that they are going to raise by 1.49% !!!

amischiefmaker

Yes it is the very same SVR that is to increase but in my original contract with the Scarborough I was not penalised for paying by standing order, now it appears I am. If they add an extra charge for non DD customers then they can't call it their Standard Variable Rate can they as they now have two rates!

VIGILANT22

No you're not being penalised, please read what I posted...it reads discount for DD's...it does not read penalty for SO!!

Thrugelmir

Pay the regular amount by direct debit as requested by the BS.

Set up a standing order for the additional amount you wish to pay.

Problem resolved.

VIGILANT22

You dont even have to set up a SO for overpayments, most lenders take payment by you calling and giving your card details, that allows you then to do it when you wish.....

amischiefmaker

Actually VIGILANT22 the letter clearly states that the new SVR is 4.95% but my new interest rate (with discount off from my original contract) doesn't add up. It's only in the small print on the reverse that all is revealed. How it should of been stated is the new SVR is set at 5.20% with a note to say there is an extra 0.25% discount for those who choose to pay by direct debit, but that would create an even bigger shock for its customers, and not look as good would it!

I preferred to pay by standing order because it meant I could budget better so no matter what the interest rates were I knew exactly what I was paying each month. In order to get the extra discount I will have to go the way Thrugelmir suggests or pay a fixed amount by direct debit as suggested on the Skipton website, problem is to change it I would have to submit it in writing which makes it a little more of an administrative burden to me. Or go shopping for a better deal which seems likely as it's no longer the best deal for me.

Wutang_2

Thrugelmir wrote: »

Pay the regular amount by direct debit as requested by the BS.

Set up a standing order for the additional amount you wish to pay.

Problem resolved.

Massively too complicated - sorry

VIGILANT22

amischiefmaker wrote: »

Actually VIGILANT22 the letter clearly states that the new SVR is 4.95% but my new interest rate (with discount off from my original contract) doesn't add up. It's only in the small print on the reverse that all is revealed. How it should of been stated is the new SVR is set at 5.20% with a note to say there is an extra 0.25% discount for those who choose to pay by direct debit, but that would create an even bigger shock for its customers, and not look as good would it!

I preferred to pay by standing order because it meant I could budget better so no matter what the interest rates were I knew exactly what I was paying each month. In order to get the extra discount I will have to go the way Thrugelmir suggests or pay a fixed amount by direct debit as suggested on the Skipton website, problem is to change it I would have to submit it in writing which makes it a little more of an administrative burden to me. Or go shopping for a better deal which seems likely as it's no longer the best deal for me.

You mean the same administrative burden as Skipton experience for people on SO!!