Advice re Northern Rock debacle

ken_1969

I'd really like some advice.

Northern Rock messed up my mortgage review this year - I was approved for a 2 year fixed rate of 4.99% back in January which should have taken effect as of June, which should have meant I was paying £1,700 approx. However, somehow they stuck me on their standard Variable Rate instead.

They cannot explain why the error occurred, but have admitted responsibility and have agreed to reimburse me the overpayment (and the additional £3k interest charged to my mortgage account!).

They also agreed to put me back on the two year fixed rate, but are claiming that now it is 6 months further along I will be paying £1,800 a month. Given that this is their mistake, does that seem reasonable?

What I would really like to do is tell them to stick it and go else where, as I know since visiting this site that there are much better mortgage deals around.

But, as they are now putting me back onto their 2 year fixed rate I would incur a 3% penalty (about £7k!) which I am obviously reluctant to do - although I have seen deals on the internet which look like they would save me about £300-400 per month - even with the extra £7k on the mortgage!

Do you think I have reasonable grounds to insist that I should not be liable for the 3% penalty as they have not honoured the fixed rate deal we agreed?

Ken

dunstonh

When you arranged the mortgage, did you use a whole of market mortgage adviser? Details like this are checked by them and they would have some liability on that front to resolve it.

You would have been sent a mortgage offer letter which your solicitor would have verified the rate and terms with you before you signing it. Does the offer letter show the fixed rate terms or variable rate?

If the offer letter shows the 2 year fixed terms at the original rate, that is what you should get. If it doesnt show that but shows variable rate, then you are partly to blame for accepting those terms and the current deals would be acceptable.

If you are on variable rate now, then there is no tie in and you could remortgage. You just need to tell them not to change your deal unless they use the original rate. I would expect them to need a new lending offer letter to be signed confirming the terms. They cant just stick you in a new deal without signatures.

dwight-van-man

If you did sign all the paperwork and everything thats happened since is NR's fault, them write in and insist that your account is restored to the position it would have been in had the mortgage review taken effect as and when it was due to.

UK007BullDog

Threaten with the FSA and the Ombudsman!