Remortgaging with the same lender

Wh05apk

Meeper wrote: »

Not really. If someone was on a fixed rate of about 7% (not out of the question as it was a 10-year fixed 5 years ago) why would you want them to start paying you 2.5% instead, even if they did have an ERC to pay? Nationwide's ERC's have traditionally been among the lowest, so let's say they were 3% to buy out. Why would you, as the lender, allow your customer to pay a 3% one-off amount and then make payments that were 4.5% lower every year for the next 5 years?

Are you crazy? That's not good business.

I can understand the logc, but surely it's better they pay the 6% erc and take another mortgage (where hopefully they will make some money?) rather than pay and remortgage to nother lender (who will make some money) I know traditionally lenders tended to make their money from clients sitting on SVR after taking "loss-leading" initial rates, but I think that is less so now, with lenders pricing deals to include their margin.

Meeper

Not in this case. Cost of funds is a lot more than 2.5% at the moment, so letting someone sit on that would not be a good commercial decision. In addition, we don't know anything about the client's LTV or circumstances. This might have been 90% LTV 5 years ago and may be at 100% LTV now. We all know the situation there.

macca789456

hi having just read Meepers comments i would like to point out a few things just so he can get a better handle on this. Firstly my fixed rate is 5.03 % Secondly my loan to value is 10%.My terms and conditions clearly state i can transfer to another product if i pay the E R C it simply is not good enough to say there is no products to transfer onto when they have several advertised online and in branch So much for there proud boast of not doing the NEW CUSTOMERS ONLY THING in there adverts And finally as i was led to believe when the fixed rate product is worked out at the time, and the money is borrowed by Nationwide to offer the product, the E R C is factored in to cover people exiting early I dont see how they expect to have there cake and eat it and not to stick to there terms and conditions.It is simply not good enough to hide behind there comment of there is no products available for people on fixed rates etc.It will be interesting to see what the ombudsmans take on this is