Natwest, it's in the small print, am I sunk?

BankBlunder

Hi,

Last August I switched mortgages to Natwest and went for one that was flexible and let you move it from one property to another and had no tie in's etc. This cost us £1,500 in fees but for our circumstances seemed to work well.

At the time we signed up we had bought the house we wanted to move to with a buy to let and rented it whilst we sold our existing house. (who knew the market was going to die) I explained all these circumstances to the agent, he said no problem and away we go.

Having now sold our house Natwest has come back and said that the product is portable, but only to a new house purchase and not for one you already own. This is set out in the agreement you signed, thanks for the £1,500 please go away. (I should say we had a two year deal and we are 7 months in and as we can't move it effectively have to get a new mortgage and pay fees again)

They have listened to the call in which I made the application, and they did not hear my explanation of the two houses and therefore no miss selling went on. They do say that I refer to earlier calls during the application, but they don't know if they will be able to find those calls and in any case their final decision is thanks and go away.

The question here is am I sunk if the agreement stated that only portable for new purchases, even if I can get them to find and listen to the earlier calls and hear my describing what I was doing?

kingstreet

Sadly, we have another misunderstanding of portability. The FSA is going to have to do something about lenders mis-explaining what this is!

Portability allows you to repay the mortgage on your current home and take out a new mortgage on a new home, during which you transfer the mortgage product which applied, for the time remaining on that product, for the remaining amount covered by the original mortgage.

In addition, the lender's latest terms and conditions, criteria etc have to be satisfied to justify the new mortgage.

For example;-

You take out a mortgage for £100,000 on a three year fix at 4% per annum. After two years, you sell the property and repay the mortgage. On completion day, you purchase a new property with a new mortgage with your current lender which is happy you meet its current criteria.

If the new mortgage is for £100,000 you keep your 4% deal for the remaining year.

If it's for less, you keep the 4% deal on the amount you're borrowing and pay an early repayment penalty on the reduction from £100,000.

If it's for more, you keep the 4% deal on the first £100,000 and take whatever new deal is available from your lender on the extra over £100,000.

What exactly did your lender tell you?

BankBlunder

Hi,

Before I made the application that agent said it was no problem.

Since we sold and made contact with them they say their T&Cs clearly state that you have to make a new purchase. There is nothing they are going to do.

Practically when the sale goes through and the mortgage is repaid, although I am 7 months into the 2 year agreement they will not move the mortgage to our other house.

I will have to buy another product and pay the fees to replace the BTL mortgage on the other house.

kingstreet

If you can justify your position and evidence what you were told, you should complain to the lender, preferably in writing. If you are unhappy with their response, you can escalate the complaint to the Financial Ombudsman Service (FoS) who will investigate and decide on the merits of the case.