Loss of 1% HSBC lifetime tracker...

Markyd

My girlfriend and I took out a HSBC mortgage four years ago (March 06), the mortgage was a homestart mortgage over 25 years.

We initially fixed for two years at 5.19% due to the variable rate but were always satisfied that if we ever went on to variable rate it was set at 1% above base for the lifetime of the mortgage, this was in the provisions of the mortgage.

After two years we received a letter advising that we should contact an advisor to discuss our options and were advised that we could fix for another two years at the same rate, which was again preferable given the variable rate at the time, everything else was to remain the same. At this time we also received a letter from HSBC advising that our mortgage was to pass over to variable rate, once again guranteed at 1% above base, the letter was received due to postal delays in them sending the offer letter for the secondary fix. We read the offer letter and were satisfied with the fix and the remaining 23 years.

A week ago I contacted HSBC to confirm that our mortgage was to pass over to 1.5% and they advised that it would not. It appears that despite the guidance from the advisor and that there being nothing in the offer letter that the provision regarding the 1% above base was removed it seems to have happened. It simply now passes to the variable rate at 3.94%.

I have contacted HSBC through the complaints procedure and will duly contact the Financial Ombudsman if this proves unsuccesful but has anyone else got any tips on how to address this? My girlfriend and I are both diligent individuals and were horrified that HSBC could get this past the two of us by mis-advising.

beecher2

Did it refer to the 1% above base rate guarantee in your mortgage offer for the present 2 year fix?

Charterhouse

Have you got a copy of the letter that confirmed the 1% above base?

beecher2

Charterhouse wrote: »

Have you got a copy of the letter that confirmed the 1% above base?

I think the letter was about the SVR which the OP would've gone on at the end of their fix 2 years ago, rather than about the follow on rate of any new fixed rate.

VIGILANT22

[QUOTE=Markyd_My_girlfriend_and_I_are_both_diligent_individuals_and_were_horrified_that_HSBC_could_get_this_past_the_two_of_us_by_mis-advising.[/QUOTE]

An important point is to check on the KFI which was issued at your last review and see which box was ticked 1 or 2.



2. Which service are we providing you with?

1.We recommend, having assessed your needs, that you take out this mortgage.

2.We are not recommending a particular mortgage for you. However, based on your answers to some questions, we are giving you information about this mortgage so that you can make your decision

Markyd

Thanks for responses. Have all the correspondence, the original doc referred to 1% offer for lifetime of mortgage for 25 years. The second doc does not mention the 1% guarantee simply that you will pass on to the variable rate. As we were guided by the advisor that the provisions remained the same for the secondary fix we did not see any issue and that the 1% above base promise remained in place with regards to their variable rate. Obviously it appears rather than fixing for two years we have signed a new mortgage. I have read the documents dozens of times over the last few weeks and still believe we have acted as diligently as possible and would never have felt the need to question as were just fixing our rate for two more years with variable so high at the time and the offer letter wholly supports this. If the offer letter had specifically stated the removal of the 1% promise we would have picked this up but it does not and the guarantee line is simply removed advising that the mortgage will move to the variable rate after the fix.

beecher2

I don't think you've got a leg to stand on to be honest as the deal you're on just now did not mention the 1% guarantee. I don't see why they should've stated the removal of a promise made in previous offers, and as you say you didn't question this at the time, or indeed compare the two offers to notice the absence of the guarantee.

VIGILANT22

The offer letter does not have to state the removal of the 1% promise...it is about the new product..and if it was service 2 you rcvd...you didn't rcv advise...ie no comeback

Charterhouse

Yep, I hate to say it but the new product will have had small print somewhere saying what the new SVR was, this is probably exactly why they tried to get you on to a new deal I'm afraid.

Gorgeous_George

People were far to eager to fix for two and three years. A whole industry blossomed providing mortgages that were, on the whole, rather pointless.

People would stay at the same house for ten years and have 5 mortgages in that time. 5 x valuations, 5 x arrangement fees, 5 x legal fees, 5 x the stress of remortgaging. I never understood it.

I'm afraid the Op has less chance of success than Skipton customers who have had their agreed rates increased. And I don't think Skipton customers will win.

I suggest you chill out and enjoy the 3.94% rate which is still far less than you should have been planning on having - and is almost 20% less than your former fixed rate.

If you must fight, don't spend too much money doing so and be prepared to lose.

I wish you luck.

GG

Markyd

Many thanks for responses, will take note for any future fixes etc.