Nationwide Introduce New Fee? Is it legal?

wotnoshoeseh

Has anybody received a mortgage statement from Nationwide recently. They are introducing a new fee of £90 for mortgage redemption on existing mortgages. I don't understand how they can introduce this new charge into an already existing financial agreement. My question really is whether Nationwide are within their rights to do this?
Also, if anyone, has successfully appealed this charge, could they let me know how they managed to do this?
I'm certainly going to resist accepting this new charge, and I'll keep you posted as to how it goes.

lisyloo

My first port of call would be the terms and conditions of the mortgage (which you should have been issued with).
Have you read these?

It might be that they have the legal infrastructure in place already but just happen to choose to charge £0.
I would be suprised if this was illegal.

Read your Ts and Cs.

bridiej

I'll have a look at our statement, think we got one about a month or so ago.....

herbiesjp

I believe that the closing/sealing fee is one that lenders are able to tweek if they want - it is normally in the T&Cs. What this highlights is that although today you may opt to go for a lender that has no or small exit charges, a year down the line the situtaion could be completely different which makes choosing the most cost effective mortgage all the more difficult.

wotnoshoeseh

I think I'll have to check my T's & C's as you suggest, lisyloo.

If there is such a clause within mortgage contracts that the fees can be tweaked at the lenders discretion then punters need to be aware of it. I will have to dig out my documents to check this.

If there is such a clause can people reject that clause in the contract, and ask for it to be removed??

Many Thanks.

lisyloo

wotnoshoeseh wrote:

If there is such a clause can people reject that clause in the contract, and ask for it to be removed??

You can ask but I'm 99.9% certain you will be turned down.
You normally would have to accept a lenders Ts and Cs.
If you don't like them you can go elsewhere but I think this is fairly standard.

They can't state fixed amounts in their contracts because some people keep their mortgage fo 25 years so it wouldn't be practical.

wotnoshoeseh

lisyloo wrote:

You normally would have to accept a lenders Ts and Cs.
If you don't like them you can go elsewhere but I think this is fairly standard.

They can't state fixed amounts in their contracts because some people keep their mortgage fo 25 years so it wouldn't be practical.

I can see where you're coming from with this, but it is unrealistic for people to effectively sign a "blank cheque" for fees of this type when signing up for a mortgage. Please remember that the redemption fee is something that will have to be paid for at some stage, whether when moving mortgage or paying it off at the end of the term. Therefore to enable effective cost comparison between mortgages this should be stipulated and tied down at the start of the term.

The fee that they are talking about here is a small amount in comparison to the amount of fees (set up fees, interest etc.) that the borrower pays to the lender over the term of the mortgage.

Whilst not a money saving expert of the same ilk as lisyloo, I would urge borrowers to stand up to their lenders and reject these fees if possible.

Lenders will only know you are peeved off by their practices, if you tell them.

wotnoshoeseh

I have learned a couple of things from this.
1. Read the T's and C's. It is stipulated within the T's and C's that they can introduce fees that they see as being for a justified expense.
2. It will only apply to those people re-mortgaging/redeeming their mortgage if they have more than 10 years of their mortgage to run. However from my understanding of the T's and C's this could be subject to change at some time in the future.

Anyway thanks for everybody's input. I will oppose the introduction of this charge in writing to NBS. I realise that it will probably not be removed but at least I will have made my point.