bank refusing refinance to more affordable rate

beaver30

i work for a large uk bank and have an exsiting mortgage with them(taken out in 2008). I currently pay interest only repayments of £530 per month on a standard variable rate of 4.95%. I have approached my branch for a staff mortgage on a repayment basis, which on the babsis of their quote of staff rate of 1.5%, I could be repaying £640 per month on a full repayment basis )this is of course not only beneficial to me as my repayments would be more affordable, but the bank would also benefit from the debt reducing. I have been advised however that given my current mortgage with them was done through a broker, and the product type does not allow them to place a staff indicator on the mortgage, I am not eligible for a staff mortgage. They have also advised that they cannot treat as a refinance, as chances are the Loan to Value (based on current market value)of the property would not sit within their lending criteria. I understand the property would not value as they would wish for. However I am not accepting the reason which appears to be a techncality that they cannot physically add a staff indicator on the particular product I am currently on. Do I have a case to argue with them? Thanks

GMS

If you do not fit their criteria then no you don't have a case. Be careful how you approach this as they pay your wages. Do not do anything which could jeapordise your employment, specifically be careful of what you post. Never know who is reading

Thrugelmir

Did you obtain your current mortgage through a broker?

beaver30

yes through a broker

Thrugelmir

beaver30 wrote: »

yes through a broker

Then its not staff product.

The_J

Thrugelmir wrote: »

Then its not staff product.

He knows that, but he can't switch from this product to the staff mortgage.

Does seem a little unreasonable. Can you remortgage elsewhere and then remortgage back to the staff rate?

Without knowing the specifics I can't comment but if they say no there isnt much you can do.

kingstreet

Did you work out the benefit in kind implications if you did get the staff rate? Did you factor it into your costings?

Off the top of my head, the HMRC rate for a staff mortgage is 4%, so you're talking about a BIK of 2.5% of your mortgage amount added to your income for tax purposes.

You a basic or higher rate taxpayer?

Assuming you owe £128,500, you would pay another £53.50 a month in tax if a basic rate taxpayer, £107 per month more if taxed at higher rate.

kingstreet

The_J wrote: »

Can you remortgage elsewhere and then remortgage back to the staff rate?

Sounds like the LTV problem is curtailing any potential changes, not just the staff rate.

The_J

kingstreet wrote: »

Sounds like the LTV problem is curtailing any potential changes, not just the staff rate.

Oh yeah, my eyes wandered with the wall of text.

If it is a LTV issue then, my friend, you're screwed. Start saving

Thrugelmir

The_J wrote: »

He knows that, but he can't switch from this product to the staff mortgage.

Does seem a little unreasonable.

Still needs to meet current lending criteria. A problem that many who obtained mortgages in the boom years are now finding.

The_J

Thrugelmir wrote: »

Still needs to meet current lending criteria. A problem that many who obtained mortgages in the boom years are now finding.

Indeed, it's a good time to be a broker. Loads of people need advice.