Nationwide increase monthly payments on fixed rate deal

Harry_J

stamper wrote: »

We seem to be clouding the issue, and it's an incredibly important one for all of us. Whether it is a BTL mortgage is irrelevant. Whether it's right that a BTL investor gets a residential mortgage is irrelevant. Whether BTL investors make money from this is irrelevant. The only relevant part is whether it is right that Nwide can introduce a large (1.5% on a 5% fix would be 30%) increase on the rate payable on a fixed rate mortgage to which both sides have agreed. Personally I suspect that this would fall foul of the Unfair Terms legislation. The FSA produced a useful document on this point you can find by searching for 'FSA statement of good practice' which seems to suggest that the term would be considered unfair. It is debatable as to whether the FSA actually covers this product as it is a residential/btl grey area, but it seems that the principal has at least been considered and found to be shaky.

Remember that Nwide state that this is due to the risk of default, so if you're feeling like BTL landlords are getting what they deserve here, it's a short step from here to Nwide doing exactly the same thing for your own mortgage if your LTV goes over a certain limit. We absolutely need to establish the principal and precedent in this case.

Absolutely spot on. If they can find a way of changing fixed rate deals they will be all at it very soon.

Ironically, the increase in premiums actually increases the risk they are trying to cover for!

HazelB343

Can someone tell me if these new charges are for just BTL mortgages?

ET1976

Harry_J wrote: »

If there are separate T&Cs, we have never seen them. We got a very nice letter of permission and nothing else. There is no mention in the letter of changes to a separate agreement. The opposite in fact. It says they introducing a new charge into the existing account.

Well you must have a different agreement with them than I have then. I have to renew CTL every 3 years and they send me a letter of the conditions of this agreement when it happens.

I can see your point if you have not been made aware of any T&Cs which apply to the letting arrangement separately from the mortgage.

Fuzzyness

I'll still have 18 months left on my mortgage when the additional 1.5% will kick in. I guess it will be worth looking at paying the early exit fees and leaving NW but this will depend on the nature of any buy to let products that may be around at the time.

it does make you wonder though. we had to let our house because i got made redundant and we had to relocate to find alternative work. shame you have to lose your house as well as your job.

katskorner

Mine is NOT fixed rate nor a BTL mortgage - just a simple resdiential mortgage. I too tried to switch to a BTL when I rented out but they said I didn't need to and gave me a permission letter. Never heard anything since until this charge. And interestingly, the letter notes my mortgage for the house I actually live in, NOT the rented property - as yet that is.

Harry_J

NeilJ01 wrote: »

I had exactly the same letter today. We were allowed to let out previous house in 2004 after we contacted the Nationwide, still retaining our 'domestic' mortgage.
Again, like others above, we took out a fixed rate in 2007 for five years so we knew what costs would be involved. I don't recall the Nationwide informing us that this letting arrangement on a domestic mortgage was only valid for 3 years.
I will have to read the small print on whatever we signed to check.

Yep, we'rve now had permission for 5 years. They didnt mention anything about 3 years when we got permission, nor when we converted to BTL. If they had I wouldnt complain.
As it stands, we will now end up with the option of a much greater than market rate BTL mortgage or the option of paying a hige ERC.

Harry_J

ET1976 wrote: »

Well you must have a different agreement with them than I have then. I have to renew CTL every 3 years and they send me a letter of the conditions of this agreement when it happens.

I can see your point if you have not been made aware of any T&Cs which apply to the letting arrangement separately from the mortgage.

We must have a different agreement, I agree. Never had any separate T&Cs, no 3 year reminders, nothing.

Chell

Steaminboot wrote: »

I am raging but relieved :mad::o

I also received this extremely poorly drafted letter today and due to it's vagueness thought i was now going to have to pay an extra £70 a month on the remaining 2 yrs of my mortgage.

As i dont rent out my home, it wasn't until i phoned them that they clarified that the fee's would only apply if i made changes to my morgage. I was put through to the team that is dealing with the changes and made complaints about the letter and the leaflet, though i can guess what effect that might have ..........

I have , at least , the relief of knowing it doesnt apply to me though so my thoughts go to those of you who are having to deal with this additional financial burden.

HazelB343 wrote: »

Can someone tell me if these new charges are for just BTL mortgages?

The letter made no sense to me! We have a tracker mortgage with them and don't rent out property out. The letter made several references to BTL policies but I presumed since it was sent to us then it must apply to us. Fingers crossed it doesn't!

It won't affect our payments if we do charge as we are over paying. I'd like the money to be paying off our mortgage rather than going on charges obviously!

Nitramak62

Did same to me agreed in principle over phone I could let unsold property at no extra fee, but by the time the form turned up the tune had changed & wanted extra 1.5 % on top.

Also watch out for their new fee structure coming in september 1st, so if you need to make any changes (Term, interest only etc) do it now to miss fees.

poppy10_2

New T&Cs, not looking good for those who are planning to let their house from Septemner:

http://www.nationwide.co.uk/mortgages/usefulinformation/letting.htm

From 1 September 2010 we are making some changes to our mortgage fees and charges. These include an application fee and additional letting interest rate for mortgage customers wishing to rent out their property.


Additional letting interest rate
Where a Nationwide agreed letting arrangement is already in place, the 1.5% additional letting interest rate will be applied:

• If you have been renting out the property for 3 years or more as at 1 December 2010, the additional letting interest rate will be applied to your account on 1 December 2010

Or

• If our records show you have been renting out the property for less than 3 years as at 1 December 2010, the additional letting interest rate will be applied to your account on the 3rd anniversary of letting

Letting application fee
The letting application fee (£50) is charged when an application to let your property is approved. The fee is only applicable to new rentals authorised and approved by Nationwide from 1 September 2010

.

On an interest-only £200,000 mortgage, your payments will increase by £250 per month if you let your house for three years due to the extra 1.5% interest rate.