First Direct - "Moving the Goalposts"

mattives

I have a 10 year fixed rate offset mortgage with First Direct where one of the attractions was that the mortgage would be portable.

I have never defaulted on the loan and have excellent credit history - no loan or credit card balances etc.

I am looking to move home and port the mortgage, but am not looking to increase the size of the loan.

First Direct are stating that they have now changed terms on their offset mortgages, and only customers who earn in excess of £30k per annum qualify irrespective of the size of the balance on my mortgage.

This is something of an issue, as it was not a requirement when I entered into the loan. I have never earned £30k per annum, and this has no bearing on the size of the loan ie whether I want to port a £100k or £10k loan, I must earn £30k.

If I wish to move, First Direct want me to pay an early repayment charge of approximately £2350, and move onto a standard fixed rate account on the same interest rate.

I really can't see how they can impose additional terms once I have signed up that have no bearing on my ability to pay.

Should I seek legal advice regarding what I deem to be an unfair contract?

Any guidance is greatly appreciated...

GMS

Please do not seek legal advice as this would be a total waste of time and money.

First Direct have not changed the terms of your agreement in any way. You can continue with the agreement you signed.

Porting a mortgage is not a straightforward case of moving it. It is a brand new application which means all criteria needs to be met at the time of application. Unfortunately for you their current criteria is outside of your circumstances.

If you need to move then a new lender would seemingly be needed and as a result you would be liable for any fees detailed in your mortgage agreement.

mattives

Hi GMS,

Thanks for the swift reply.

I know that everything has tightened up with lending, but the requirement to earn £30k wasn't in place when I signed the deal (otherwise I wouldn't have qualified at the time!). The term is no measure of ability to pay the loan as the figure is not like the usual 'income multiplier' it just feels as though I have been lured onto a portable mortgage and now the lender wants to prevent.

If say you earn £25k, and have a £25k balance remaining, how can the lender say that if you want to port this loan to a new property you can't just because you don't earn £30k... the morality just seems to be questionable!

Thanks again...

GMS

I agree with your point of view but unfortunately the lenders make the rules and can amend criteria as often as they like.

Have you tried to appeal? May be worth a try. Worst that could happen is they say no meaning you are no worse off.