Northern Rock Rip off on further advances

Mac600

I've just contacted Northern Rock to arrange for a further advance on my mortgage. I was expecting to be able to piggy back a new deal for the further advance on to the existing 5 year deal that I am 2 years in to.

It seems that NR have decided that they will no longer allow this, so I have a choice of reviewing the whole deal so that the existing mortgage and further advance are placed on a new deal but this means paying a redemption penalty on the original loan or I can have a further advance at their special loan rate of 9.9%!!!! :mad:

So much for the FSA's "Treating Customers Fairly" policy.

Has anyone come across other lenders doing this?

flammable999

My, I bet that sounded appealing to you! I will be contacting my lender botu a further advance very soon. I am also hoping to piggyback the existing agreement but your case does not bode well for me!

Mac600

Up until now I'd never heard of any lender doing this and I work in the industry and used to be a mortgage broker.

It comes across as just another way to either make extra money out of existing Northern Rock customers or getting them to leave, reducing NR's mortgage book and getting a nice redemption and termination fee in the process.

picardygirl

Mac600 are with with NR plc or NRAM ??? Because if you are with NRAM they informed all their customers in January this year, that they would no longer be able to have further advances or able to offer any new products when the current products run out.

Conrad

Mac600 wrote: »

So much for the FSA's "Treating Customers Fairly" policy.

Has anyone come across other lenders doing this?

They are treating you fairly on your existing deal - why on earth should we necessarily lenders should offer competetive other services / add on products?

Like saying I'm damned cross audi dont do cheap caravans.:D

Mac600

Conrad wrote: »

They are treating you fairly on your existing deal - why on earth should we necessarily lenders should offer competetive other services / add on products?

Like saying I'm damned cross audi dont do cheap caravans.:D

I'm trying to work out if you are a troll or just being obtuse

Northern Rock are a bank, one of their main functions is to lend money, so not exactly a different service.

If we stick to your Audi anaology, it's more a case of an owner of a 12 month old A4 going to the dealers and asking to buy the latests alloys to fit on his car and being told that in order to get the alloys he must sell his current car and buy the new one as they won't sell them to him (even though they will fit).

I can't think of any other lender that will not offer mortgage deals on further advances on a piggy back basis.

Mac600

picardygirl wrote: »

Mac600 are with with NR plc or NRAM ??? Because if you are with NRAM they informed all their customers in January this year, that they would no longer be able to have further advances or able to offer any new products when the current products run out.

I am assuming NR Plc as I haven't had any correspondance to any other affect.

The stupid thing is that if I consolidate everything in to a new 2 year deal on a lower fixed rate than I am currently paying, I will actually make back around 80% of the early redemption penalty back via lower payments and be free of any future redemption payments a year earlier than I would have been otherwise.

Still not ideal and certainly not treating customers fairly.

picardygirl

Mac600 wrote: »

I am assuming NR Plc as I haven't had any correspondance to any other affect.

Every Northern Rock mortgage customer received a letter in January (well they should have done) regardless of which company they are now with. A colleague of mine who has a NR mortgage, has been retained by Northern Rock plc and he had a letter informing him of such (received the same week as all the others were sent out), he is able to take out further advances on his mortgages and will be offered new products when his existing deal finishes, only if he ticks all the boxes then obviously.

So if you havent received one, maybe you should give them a call and find out which part of NR your mortgage is on.

VIGILANT22

If Mac600 has been offered additional borrowing he is with NR PLC... further borrowing is offered as a secured loan around the rate he has quoted...

Mac600

VIGILANT22 wrote: »

further borrowing is offered as a secured loan around the rate he has quoted...

5% above their standard variable rate is just pure profiteering.

dunstonh

If we stick to your Audi anaology, it's more a case of an owner of a 12 month old A4 going to the dealers and asking to buy the latests alloys to fit on his car and being told that in order to get the alloys he must sell his current car and buy the new one as they won't sell them to him (even though they will fit).

Its more like having an Audi A4 and going back years later to ask for an Audi A6. The scale of what you are doing is a little more then just alloys - in audi speak

I can't think of any other lender that will not offer mortgage deals on further advances on a piggy back basis.

There is a list a mile long following the credit crunch.