Nationwide changes again!

Money_Worry_Wort

Rikki123 wrote: »

Thanks for this thread. I received a letter from Nwide today, the 1.5% rate rise affects me.
I'm in a middle of my five year fixed deal, and presumably if I try and change my deal to another, cheaper Nwide product, I need to pay the early redemption charge...? If yes, would anyone know if this could be challenged as this is a change very detrimental to the customer and not in accordance with the FSA Treating Customer Fairly principles?
Long shot, I know...
Thank you all.

We are in exactly the same situation. We agreed a 5 year fixed rate with nationwide and have budgeted around that. This increase will cost us approx. 180 more a month, which cannot expect our tenant to pay. We called Nationwide and they said it is within their rights to do this as it is a change to a charge not to their interest rate. They also said they had consulted with the FSA before implementing this. Not sure if that is true or the guy was just trying to get rid of us. Has anyone else had a better result?
Our early redemption fee is almost the same as paying the extra for the 26 months left. They really seem to have us caught. Anyone that can help?

Thrugelmir

Money_Worry_Wort wrote: »

We are in exactly the same situation. We agreed a 5 year fixed rate with nationwide and have budgeted around that. This increase will cost us approx. 180 more a month, which cannot expect our tenant to pay. We called Nationwide and they said it is within their rights to do this as it is a change to a charge not to their interest rate. They also said they had consulted with the FSA before implementing this. Not sure if that is true or the guy was just trying to get rid of us. Has anyone else had a better result?
Our early redemption fee is almost the same as paying the extra for the 26 months left. They really seem to have us caught. Anyone that can help?

They are well within their rights as consent to let is not an automatic right for the borrower, but is discretionary by the lender. If consent to let is actually a permanent change ( i.e. BTL) as opposed to temporary vacation by the borrower for say a period of working overseas. Then the lender is within their rights to levy a charge that reflects the additional risks they bear.

Personally I believe Nationwide is shaking the tree in an attempt to weed out borrowers who are overextended and would be in difficulties when rates envitably rise in the future.

MissMoneypenny

Those letting without Permission to Let are covered in the new taffifs too.

Non-consent letting fee: Charged if we discover you are letting your property without our consent.

Dependent
on individual
circumstances

http://www.nationwide.co.uk/pdf/mortgages/M628_mortgage_fees.pdf

alanobrien

Just received the letter myself this morning. I wonder if the £20 fee for reducing the term applies to lump sum overpayments ? I have sent them a PM to find out since its not clear in the letter.

ashcarrot

spikeydudeuk wrote: »

On the letting fees (£50 one-off fee plus 1.5% extra interest) - I spoke to customer services at the weekend, and they clarified that this only applies when you're letting the whole of your property out. Apparently they'll carry on granting permission to take in a lodger without charge.

Are you supposed to ask they're permission to take on a lodger then?

MissMoneypenny

ashcarrot wrote: »

Are you supposed to ask they're permission to take on a lodger then?

On the Nationwide site it states:-

Under the terms and conditions of your mortgage, you must seek agreement from Nationwide to rent out the property and any breach in these conditions would be taken very seriously.
http://www.nationwide.co.uk/mortgages/usefulinformation/letting.htm#questions

You could always get it in writing that thay they give permission for a lodger. Living in the house is a bit different to renting the property out, as you are in the property too.

You also have to inform your insurers. We all know how insurers like to get out of paying a claim.[FONT=&quot]

[/FONT]

alanobrien

alanobrien wrote: »

Just received the letter myself this morning. I wonder if the £20 fee for reducing the term applies to lump sum overpayments ? I have sent them a PM to find out since its not clear in the letter.

They got back to me to state the charge does not apply to regular monthly overpayments, only a "manually adjusted term". Didnt answer the other question about irregular lump sum payments so i have repeated the question.

alanobrien

alanobrien wrote: »

They got back to me to state the charge does not apply to regular monthly overpayments, only a "manually adjusted term". Didnt answer the other question about irregular lump sum payments so i have repeated the question.

ok finally got a proper confirmation, lump sum overpayments are not subject to the charge.

jrawle

I'm glad to see that reducing the term through overpayments won't incur the new £20 fee. It's good that people have this in writing, although I'd still like to see people not being charged £20 after September due to my natural reluctance to believe anything customer service people say.

I did think that it doesn't really matter anyway, at least if you are on the BMR with no limit on overpayments. You can choose to reduce monthly payments instead of reducing the term in months where you overpay by £500 or more. If there's no limit on overpayments, you can simply overpay even more the following month. Eventually you might reach an outstanding balance of only £1 with five years left on the mortgage, which is the same as shortening the mortgage by 5 years in all but name.

The other advantage of not reducing the term is the uncertainty in interest rates. If you are choosing to overpay more rather then being forced to pay more each month due to a shorter term, you can always reduce the overpayment if the rate goes sky high. But once on a shorter term, the lender might not be willing to agree to an increase in term if you are struggling to make payments.

Nitramak62

Spoken to nationwide as I haven't sold so am going to rent & it appears to go like this.

If renting before 1st septmeber:

Extra 1.5% will come into effect on 1st December 2010 (3 months notice) unless you have rented for less than 3 years then it will happen on the third aniversary of renting starting.

If renting after 1st september;

You can rent for 6 months from 1st December before the extra 1.5% comes into effect.

I'm moving out / letting on September 17th so will only stay on 2.5% rate until june 2011, but if I move out early & start renting on 31st August stay on 2.5 % until August 2013.

go to:-
www.nationwide.co.uk/mortgages/usefulinformation/letting.htm

I would still recommend you contact nationwide as your circumstances could be different.