When is a product not a product?

chirpchirp

My mortgage terms and conditions say that the product is portable. I now need to port my mortgage but I'm told it can't be done as it is now no longer a "product". The terms and conditions do not describe what the company mean by "product". Their advisor tells me that when the special rate ends and I transferred automatically to a different rate that the "product" came to an end and therefore so did its portability. Is this normal practise or is this a case that my mortgage company wants to get me off my super interest rate and onto a higher rate?

herbiesjp

If your original offer letter states your product is portable (Section 10), then you have got a portable product.

Porting is not guaranteed however, and it is treated like a brand new mortgage application, fully underwritten, and you will have to meet the current lending criteria.

opinions4u

It can vary from lender to lender.

The product is usually a fix or a tracker for a certain number of years.

The go to rate (typically the SVR) isn't a product and therefore isn't portable.

I am, however, speaking generically and different lenders will adopt different policies.

maninthestreet

OP - what interst rate are you paying now, and how does this compare to your lender's SVR?

VT82

chirpchirp wrote: »

My mortgage terms and conditions say that the product is portable. I now need to port my mortgage but I'm told it can't be done as it is now no longer a "product". The terms and conditions do not describe what the company mean by "product". Their advisor tells me that when the special rate ends and I transferred automatically to a different rate that the "product" came to an end and therefore so did its portability. Is this normal practise or is this a case that my mortgage company wants to get me off my super interest rate and onto a higher rate?

The product, in theory (i.e. the way everyone thinks about it), is the introductory rate. However, technically, every product says something along the lines of 'it will be this for two years, then reverting to our SVR rate currently x%/BBR + y% for the remainder of the term...'. It doesn't say 'it will be this for two years, then will switch to our SVR product, with a current rate of x%...' - hence the reversion rate is part of the product. Your lender trying to argue otherwise is a complete fob-off.

You will still need to have the portability application underwritten like a new mortgage, but if your product was supposed to be portable, and you want your rate ported, I would kick up an almighty stink to get my way if I were you.

Thrugelmir

There is distinction between the mortgage itself and a product. A product is the wrapper that may last 2 years, 3 years or the term of the entire mortgage and defines the interest charge etc.

As has been already said previously. At the end of a fixed product term, the mortgage will default onto a lenders SVR. The terms and conditions of which will be covered by the original contract. It is unlikely that the mortgage contract itself will confer any right to portability. If it does then you can discuss the matter with your lender.

Your lender can decline your remortgage application if they wish anyway. So in reality they will come out winning.

InMyDreams

But it doesn't sound like the OP is on the lender's SVR yet: "is this a case that my mortgage company wants to get me off my super interest rate". If I'm wrong and they are on the regular SVR anyway, then what exactly is it that they want to 'port'? As said already, even portable products are only portable if you still fit the criteria, and if they still fit the criteria for the SVR rate, what's stopping them just taking out a new SVR on their new place when they sell their current?

VT82

It sounds like it reverted to a base rate tracker for term after the incentive period finished - definitely a product worth porting if that is the case, as it will be a lower rate than most new mortgage rates, and without an arrangement fee.

Thrugelmir

InMyDreams wrote: »

But it doesn't sound like the OP is on the lender's SVR yet: "is this a case that my mortgage company wants to get me off my super interest rate". If I'm wrong and they are on the regular SVR anyway, then what exactly is it that they want to 'port'? As said already, even portable products are only portable if you still fit the criteria, and if they still fit the criteria for the SVR rate, what's stopping them just taking out a new SVR on their new place when they sell their current?

Good point you've raised. What most people fail to realise is that the mortgage isn't actually ported. The old mortgage is actually redeemed and a new one entered into. The lender is being clever and saying we no longer sell this product so you can't port it. Um....... Just another way of breaking a promise rather than a contractual agreement.

getmore4less

lender?

original deal?

current rate?