Nationwide Mortgage - new fees and charges

albo2002

I got the letter last night, particularly frustrating as I only agreed a new BTL mortgage deal that I'd budgeted for a few months ago.

Does anyone know if this extra 1.5% applies to people who's fixed rate has ended and they are now on Nationwide's SVR?

beecher2

tuetsu wrote: »

Fair enough I said, but then I asked, so now mortgage fees and charges are based on the size of the mortgage? So the cost of Nationwide sending me a letter could be a lot cheaper than somebody with a £300,000 mortgage?!? Something's not right here!

Sometimes they are, ie arrangement fees can be a percentage of the amount borrowed. ERCs usually are too.

beecher2

albo2002 wrote: »

Does anyone know if this extra 1.5% applies to people who's fixed rate has ended and they are now on Nationwide's SVR?

I can't see how they wouldn't be.

Vincenzo

albo2002 wrote: »

Does anyone know if this extra 1.5% applies to people who's fixed rate has ended and they are now on Nationwide's SVR?

Yes, if I recall correctly this is specifically stated in the leaflet.

I really do think this whole saga requires more media coverage. The fact that Nationwide have targeted those who have let their properties should not detract from the fact that these are their customers (members) who, in the main, entered into a residential mortgage agreement in good faith. One that clearly allowed them to let, with consent, with no extra 'interest'. Take note ALL Nationwide members!

I have no objection to Nationwide introducing these charges, provided they do not introduce them retrospectively.

This will certainly be my last encounter with Nationwide and their associated companies.

ET1976

payless wrote: »

If the consent was for a fixed period and coming for renewal , or a new consent then the fee may not be so unfair

But this is exactly what they are doing - they give consent for 3 years at a time, the letter (certainly the one I got) clearly says that the new rate will be applied on the 3rd anniversay of the issuing of the consent to let.

I don't see why this is unfair.

If you have been daft enough to take out a 5-year fixed rate when you knew you only had a guarantee of consent to let for 3 years of that fixed rate period, you can't really complain.

Perhaps you could say that Nationwide shouldn't have let you take out a 5-year fix, or should have pointed out the potentail pitfalls to you more carfeully, but if you're grown up enough to be renting out a property you shouldn't really need your hand holding like that.

Vincenzo

ET1976 wrote: »

But this is exactly what they are doing - they give consent for 3 years at a time, the letter (certainly the one I got) clearly says that the new rate will be applied on the 3rd anniversay of the issuing of the consent to let.

I don't see why this is unfair.

If you have been daft enough to take out a 5-year fixed rate when you knew you only had a guarantee of consent to let for 3 years of that fixed rate period, you can't really complain.

Perhaps you could say that Nationwide shouldn't have let you take out a 5-year fix, or should have pointed out the potentail pitfalls to you more carfeully, but if you're grown up enough to be renting out a property you shouldn't really need your hand holding like that.

This is an important point. My letter actually stated that the fees would apply on the "3rd anniversary of letting". There was no mention of the consent period. Did you read this to mean that if you have let for 4 years but still have 2 years remaining of the current consent period, you will not be charged?

I don't think it is valid to say that someone should not have taken a 5 year fixed rate. The mortgage t&cs clearly state that consent to let will not be unreasonably withheld so there is no reason to think you might not be given consent. The fees did not exist until now and there was no reason to think they would be introduced. The t&cs also state that the interest rate will NOT rise during the period of a fixed rate. The fact that they call this a charge and not interest is purely a matter of wording. Anyone who read their t&cs carefully and made the decision to take a 5 year fixed rate on the basis of a initial 3 year consent to let, would in my view have taken a reasonable and informed decision, in fact it would at the time have appeared a shrewd move.

ET1976

Vincenzo wrote: »

This is an important point. My letter actually stated that the fees would apply on the "3rd anniversary of letting". There was no mention of the consent period. Did you read this to mean that if you have let for 4 years but still have 2 years remaining of the current consent period, you will not be charged?

I don't think it is valid to say that someone should not have taken a 5 year fixed rate. The mortgage t&cs clearly state that consent to let will not be unreasonably withheld so there is no reason to think you might not be given consent. The fees did not exist until now and there was no reason to think they would be introduced. The t&cs also state that the interest rate will NOT rise during the period of a fixed rate. The fact that they call this a charge and not interest is purely a matter of wording. Anyone who read their t&cs carefully and made the decision to take a 5 year fixed rate on the basis of a initial 3 year consent to let, would in my view have taken a reasonable and informed decision, in fact it would at the time have appeared a shrewd move.

Point 1 - I assumed (before I got the letter) that as I was already beyond the initial 3 year period I would be charged from 1 December this year. However, my letter clearly states that I will be charged on the 3rd anniversary of the current consent to let period. I don't remember the exact wording but I read it about 10 times to be sure as I was (pleasantly) surprised.

Point 2 - "The mortgage t&cs clearly state that consent to let will not be unreasonably withheld so there is no reason to think you might not be given consent."

This does not give you any guarantee at all. It certainly does not give you any guarantee that the terms of the consent to let will not be changed if and when it is re-granted.

"The fees did not exist until now and there was no reason to think they would be introduced."
Why would anyone think there was no reason for the lender to review the rate at which you are borrowing when you are clearly no longer using the mortgage for residential purposes?

"it would at the time have appeared a shrewd move" - so people doing this thought they were one step ahead of Nationwide and now they are not looking so clever?

If Nationwide advised people to take out these 5-year fixes whilst knowing the customer was relying on consent to let, or did not explain the 3-year thing to them, then fair enough, I think there would be a case for complaint that at the time they mis-sold products or mis-advised customers. This is different to the change in fees being unfair though.

Vincenzo

ET1976 wrote: »

Point 1 - I assumed (before I got the letter) that as I was already beyond the initial 3 year period I would be charged from 1 December this year. However, my letter clearly states that I will be charged on the 3rd anniversary of the current consent to let period. I don't remember the exact wording but I read it about 10 times to be sure as I was (pleasantly) surprised.

Point 2 - "The mortgage t&cs clearly state that consent to let will not be unreasonably withheld so there is no reason to think you might not be given consent."

This does not give you any guarantee at all. It certainly does not give you any guarantee that you the terms of the consent to let will not be changed if and when it is re-granted.

"The fees did not exist until now and there was no reason to think they would be introduced."
Why would anyone think there was no reason for the lender to review the rate at which you are borrowing when you are clearly no longer using the mortgage for residential purposes?

"it would at the time have appeared a shrewd move" - so people doing this thought they were 'getting one over' on Nationwide and now they are not looking so clever?

If Nationwide advised people to take out these 5-year fixes whilst knowing the customer was relying on consent to let, or did not explain the 3-year thing to them, then fair enough, I think there would be a case for complaint that at the time they mis-sold products or mis-advised customers. This is different to the change in fees being unfair though.

I am not a lawyer however I understand by including the statement that they will "not unreasonably withhold consent" essentially does guarantee consent, unless there is a legal or contractual reason they can withhold it (ie within reason).

Granted, the terms of consent can be changed BUT the t&cs state the interest rate will not be changed in a fixed rate period. I cannot see how this can be interpretted any other way.

You used the term 'getting one over', I tend to make informed financial decisions that I believe are beneficial to me! Is that not the MSE way?!

seraphina

If it's only being applied on the 3rd anniversary of consent to let then that strikes me as perfectly fair - by that stage it's hardly a stop-gap rental, is it? I can see why N'wide have decided that the mortgage is more commercial in nature and straying into BTL territory, with all the risks that implies.

Vincenzo

ET1976 wrote: »

Point 1 - I assumed (before I got the letter) that as I was already beyond the initial 3 year period I would be charged from 1 December this year. However, my letter clearly states that I will be charged on the 3rd anniversary of the current consent to let period. I don't remember the exact wording but I read it about 10 times to be sure as I was (pleasantly) surprised.

Hmmm...I wonder if that means people might have time to declare they have ceased letting their property and then re-apply for 3 years consent before the rule change in September? Unlikely this will work if done by the book due to any tenancy agreements in place but anyone with a void property might want to consider if this is viable.