Mortgage t's and c's

Gonnabedebt3

Hi all I'm working on getting debt free and blogging about it. I have huge debts and now taken the DMP route which has reduced stress massively. I should be debt free by 2025 Yaaaay or before (working on before)
However I've a question about mortgage t's& c's which I've also put on my blog as follows
"I had a scare last week. First Direct the bank that I had been with for 15 plus years with a fantastic record suddenly got heavy. We have 2 cheque accounts and a fixed rate 4.99% offset mortgage account. One of the checking accounts has a small overdraft facility of £250 with an actual overdraft of £200. The offset mortgage account has a redraw facility so that I can (could) re use any capital paid off.!
Well First Direct contacted me to say that they had noticed I had used the redraw facility repeatedly. Therefore they were taking away this option. I argued (discussed) that the redraw facility was part of the t's and c's and therefore they should not unilaterally take this away. They said they had noticed I was on a DMP and therefore this was the responsible thing to do. So, thinking quickly I said, well if you can change the t's and c's as its the responsible thing to do and in my (ha - their) best interest then the responsible thing to do would be to reduce the interest rate I am paying to a more reasonable rate. But oh no I've signed up to to a fixed rate and that would be a change before the fixed rate expires (1year early) so that's not possible - unless I want to pay an early redemption fee!!!! So they can change the t's and c's but I can't pay a fair rate of interest!

Any ideas? is what they have done legal or ethical?!"

Comments welcome!

Thanks all
As a newcomer (as I can't find my old login) I can't post links but if you are interested in my blog it's at gonna be debt free . Com and it does refer back to this site which I think is amazing.

Thrugelmir

The withdraw facility is most likely not intended to be a cashpoint facility. But one to be used sparingly for major singular items of expenditure.

Given your current existing financial circumstances you aren't in a position to argue. Lenders are increasingly having to consider the financial circumstances of the borrower when making decisions.

Gonnabedebt3

Yes I agree with what you say Thrugelmur but if they are considering my financial situation why won't they reduce the interest rate to for example standard variable rate saving me 1-2%

opinions4u

If the terms and conditions offer the facility without restriction, then you could complain and would probably succeed at the FOS.

More likely there's a "subject to status" get out clause for them so they can withdraw it.

Are you meant to borrow any additional funds when on a DMP? That seems a bit unfair to other creditors accepting lower payments or removing interest charges.

Yes I agree with what you say Thrugelmur but if they are considering my financial situation why won't they reduce the interest rate to for example standard variable rate saving me 1-2%

If they are considering individual circumstances they will see that you are higher risk these days. So removing credit facilities and increasing interest rates would be sensible ways for a lender to mitigate their risk.

Thrugelmir

opinions4u wrote: »

Are you meant to borrow any additional funds when on a DMP? That seems a bit unfair to other creditors accepting lower payments or removing interest charges.

The lender has to tread carefully. As this money in certain circumstances could be claimed by the creditors.