Nationwide increase monthly payments on fixed rate deal

smapjb

I am in exactly the same position. I am locked into a 5 year fixed rate and now facing the 1.5% hike. (am fixed at 5.67%)

Again I accept that it is right for them to charge extra.. but what I do not accept is that I do not have a 'get out'

Either I pay 10K over the next 3 years in increased charges or I pay 6K in early repayment charges. That is clearly unreasonable.

I am pressing for them to waive the early repayment charges, will sell up and close my ISAs, flexaccount, loan account and everything else I have in the Nationwide.

Vincenzo

getmore4less wrote: »

They are not withholding they are just adding some charges in line with other lenders in the industry.

yes, I know!

Money_Worry_Wort

We are in the same boat. Again we had a residential mortgage with the Nationwide for the property, which we lived in for 3 years. At almost the same time it was due to expire we changed to letting the property. We duly informed them of this by phone and they agreed to offer us a 5 year fixed term mortgage. Therefore at no point have we change the conditions of our loan or mislead the Nationwide. We did not sign any letting consent contract and therefore have no other T&C's to call on. Nationwide should have addressed the increased risk at that point and offered us an appropriate rate or asked us to find an alternative mortgage with someone else, however during the boom time they were perfectly happy to hold on to our business and merrily collect our monthly repayments.

As others have also commented the rate 5.69% is not especially good and we have paid a premium for the past two years but when you fix a mortgage that is the risk your take for the security of knowing your monthly costs. A quick search of BTL rates show between 5-6%, so an additional 1.5% takes us well above the market. Our ERC is 4600 and therefore not an easy amount of money to claw together.

The increase equates to 180 per month, who can feasibly ask a tenant to pay that? Our tenant will leave and then we will default on the mortgage. Is that really what Nationwide want? Lots of repossessions and lost income? This move baffles me.

If anyone can give further info or advice on how to deal with this please do. Anyone wishing to gloat and say I told you so can save themselves the effort.

Vincenzo

Hey Money Worry Wort, unlike the Landlord bashers on here I sympathise with your situation. It is difficult to advise without knowing your exact position but I can think of a few options depending on when ur CTL ends and what other property u own. Let me know on here or pm me and I will advise as best I can.

getmore4less

The defense for nationwide is why are these people fixing on extra long terms when they are on short term consent to lets to get them through a problem time.

Its clear they are trying to maintain a resisdential mortgage on a long term let situatation where consent to let is by it nature a short term situation.

Vincenzo

getmore4less wrote: »

The defense for nationwide is why are these people fixing on extra long terms when they are on short term consent to lets to get them through a problem time.

Its clear they are trying to maintain a resisdential mortgage on a long term let situatation where consent to let is by it nature a short term situation.

So the defence is that after giving consent to
let they tied their mortgage holders into fixed terms with redemption penalties with, actually, no limit to the period of consent......

nancemiller

How do i appeal against this, are there are legal loopholes to stop me from having to accept the 1.5% increase on my tracker mortgage? I have checked through the T&C's and this seems to be against their own agreement with me. Is it worth discussing with the ombudsman? Going into a branch to discuss? Has anyone had any joy appealing this decision?

Thanks

opinions4u

nancemiller wrote: »

How do i appeal against this, are there are legal loopholes to stop me from having to accept the 1.5% increase on my tracker mortgage? I have checked through the T&C's and this seems to be against their own agreement with me. Is it worth discussing with the ombudsman? Going into a branch to discuss? Has anyone had any joy appealing this decision?

Thanks

1) Make a written complain to Nationwide specifically asking them not to apply the charges. Ask them for a "letter of deadlock" if they refuse.

2) Go to the Ombudsman stating why you think it's unfair.

3) Wait for several months while the Ombudsman deals with it.

When I first got involved in mortgage lending, consent to lease always involved a 2% additional rate over and above the SVR and was always intended as a short term solution.

I understand why Nationwide have applied the weighting. It makes commercial sense from a risk perspective and strikes me as reasonable for all new customers putting themselves in that position.

Applying the change to those who believe that they have already agreed their terms for letting strikes me as potentially unfair. It's more than possible that the FOS would agree.

Thrugelmir

Money_Worry_Wort wrote: »

The increase equates to 180 per month, who can feasibly ask a tenant to pay that? Our tenant will leave and then we will default on the mortgage.Is that really what Nationwide want? Lots of repossessions and lost income? This move baffles me.

Why should the tenant be pay it? You are in effect running a business so you take both the rewards and risks of the venture. If the property is your pension fund then subsidise it.

Mortgage interest is offsetable against rental income. So I assume from your comments that you aren't declaring this income to HMRC.

The Nationwide is losing income for precisely the reason you state "Our tenant will leave and then we will default on the mortgage". Hence why it needs to charge a rate that reflects the risk.

Thrugelmir

opinions4u wrote: »

When I first got involved in mortgage lending, consent to lease always involved a 2% additional rate over and above the SVR and was always intended as a short term solution.

Back then, what were considered reasonable grounds to grant CTL to the borrower?