Moving from fixed to Variable Rate

pinickitty

I took out a mortgage in July 2007 on a 5 year fixed and due to the calendar the first working day was the 2nd July 2007. I am due to move to the variable rate but my mortgage provider (Nationwide) says I can only move to the variable on the 1st August 2012 as I started my mortgage part way through a month (i.e the first working day but the 2nd actual day) and they can only change the rates on the 1st of the month (even though the first working day in July is also the 2nd July 2012). This means I will be paying the higher rate of interest for an entire extra month costing me approx £450 in interest. Does anyone know is this practice is either fair or legal as it seems to be a policy that will only benefit the mortgage provider?

Thanks

Dave_Ham

This is normal, you pay your mortgage in advance..

I would be happy for forthcoming saving, especially when I assume you are going onto the 2.5% BMR?

Enjoy...

kingstreet

A difference of £450 for just one month?

How big is your mortgage and what was your fix?

On what date did completion take place, as the rate runs for five years from then?

Idiophreak

Dave_Ham wrote: »

I would be happy for forthcoming saving, especially when I assume you are going onto the 2.5% BMR?

Enjoy...

That was my first thought...but £450 is £450...and I know I was counting the days until we switched to bmr recently...

Thrugelmir

pinickitty wrote: »

Does anyone know is this practice is either fair or legal as it seems to be a policy that will only benefit the mortgage provider?

If interest rates had risen. Then the borrower benefits. Swings and roundabouts so to speak.

Totally legal. Has been calculated in this manner for many years.

pinickitty

Just checked my mortgage document which clearly states I should have completed on the 29th June 2007 and my fixed term would end on the 30th June 2012. The only reason it didnt commence on this date and instead started on the 2nd July 2007 is because Nationwide forgot (yes forget) to transfer the funds on the correct day to which they have already accepted liability for and at the time they refunded me the cost of removals that were booked for the 29th June 2007 and sent me a case of wine. Surely since this change of completion date was purely down to the incompetence of Nationwide they should stick to the original document?

My fixed rate was 5.49% and I will be moving to the 2.0% above base rate so a 3.49% differential for one month on a sizeable mortgage adds up to atleast £450

pinickitty

The really annoying thing is that they said if I had started on the 1st July 2007 it would have been OK for me even though it was a Sunday and they say they can only change the rates once a month on the 1st day which again would have been a Sunday. Do banks now open on Sundays?

harvey115

Maybe after NatWest they might try to open on Sundays

Nationwide accepted their mistake on the date of completion and compensated you with the costs. However the compensation was probably not enough looking at the other end of the Fix deal. If you have any evidence, I would say you go to the local branch and show everything and make sure that the branch staff understands the issue. If they understand it they might just give you some money back as a form of compensation i.e. the difference £450 ish

pinickitty

Just checked my online account and my interest charge for the year so far has been reduced and the rate changed. Seems a simple complaint did the trick.

Thanks

Nick