Switching deals after mortgage offer before completion

geek1981

Hi

I've received a full mortgage offer from Post Office on a 5 year fix 3.59% till 09/2017 for a 207k loan couple of months ago. I'm buying a new-build which completes in Jan 2013 and still haven't exchanged yet. Today i noticed on PO website there are better rates available which works our cheaper for me. These are the two options :

1. 3.19% (with 1495 fees) till 12/17 - £1002 / month
2. 3.45% (no fees) till 12/2017 - £1030 per month

I would really like to go for (1) as it works out 1k cheaper than (2) even with paying fees in 5 yrs. Do you know if lenders allow you to switch deals before completion? Anybody got experience with Post Office doing this?

cheers!

dimbo61

Your existing offer may run out before you complete so give the post office a call and ask!

geek1981

dimbo61 wrote: »

Your existing offer may run out before you complete so give the post office a call and ask!

My existing offer expires on 28/02/2013 - also will be exchanging contracts subjected to completion by end of jan. It's £44 / month cheaper on 3.19 deal so really wanted to switch. I'm waiting for a call back from PO.

geek1981

Just wanted to update and thank you guys for your reply. I got my new offer today with the lower rates. Sounds pretty easy to switch before completion with PO.

Brinkster

I'm glad this worked out for you. I wish HSBC had handled the same issue with me so quickly. We found out our product had been slashed by 0.2% before they'd even got our signed application. We rang several times before they took the booking fee and got fobbed off, and then after the booking fee had been taken they told us along the lines of "sorry, too late, if you'd told us before the booking fee was taken we could have changed it, but now you'll have to pay another fee to switch or stay on the higher rate".

I wasn't happy, so they logged a complaint on my behalf on the basis that if their advisors had been fobbing me off, they'd still switch me on to the lower rate for free, as could've been done at the time. FOUR weeks on and they haven't even looked at the complaint yet and have effectively frozen our application until it's resolved - needless to say, the vendors and the whole upward chain are none too pleased...

Just what we needed with Xmas looming and needing to give notice on our rental by the end of this month, and our baby's first Xmas too. Luckily during my most recent chase up I think the lady I've spoken to has been a bit more helpful, but I won't count my chickens until they actually address it.

Thread here btw - https://forums.moneysavingexpert.com/discussion/4236317
Most "money savers" voted for me to bend over and let HSBC screw me for the higher rate.

QBSBuck

Most hey? How big is your sample size?

Just a question, but how much do you stand to save if HSBC rule in your favour? Will it be worth the risk of collapsing your chain while everyone waits? I hate to see the little guy get beat on, but the hassle factor swings it against the appeal for me.

Brinkster

QBSBuck wrote: »

Most hey? How big is your sample size?

Just a question, but how much do you stand to save if HSBC rule in your favour? Will it be worth the risk of collapsing your chain while everyone waits? I hate to see the little guy get beat on, but the hassle factor swings it against the appeal for me.

If they rule in our favour it will save us around £1,900 over the 5 year fixed period. There's the principle too. If it drags on much longer though, I will just withdraw the complaint, pay another £600 booking fee (still £1,300 better off than sticking on higher rate) and pursue a refund after completion, involving the FOS if necessary.

It's not like I planned this. The guy who raised it as a complaint for us never warned how long it would take or that it would freeze the whole application.

geek1981

Found PO has put rates further down yesterday for 5 year deals. I have called them to change my deal as i haven't completed yet. This time I'm going for the 2.99% deal for 5 yrs (75% LTV). There is a £1495 arrangement fee but still works out better as it will cost me £50 cheaper monthly.

charliexyz

I'm looking at a PO mortgage and hope to apply soon, and came across this thread. I too will be buying off-plan, hope you don't mind a few queries on the matter from me!

If you did not contact the PO, would they have reduced it at all?

If the rates went up, would they have changed your deal?

I'm hoping to get the 75% LTV at 2.99 fixed for 5 years which sounds too good to be true, but unfortunately will not be able to Complete until May 2013.

geek1981

No problem.

Once you receive their offer ( lasting 6 months), they will not contact you for changing deals, its your personal decision to change it or not. I would recommend you keep an eye on their rates cos it's the second time they changed rates in 3 months. If you want to change deals, you just have to call them and they will do it straight away. Took me 3 days last time to get the amended offer with new expiry date. If there was any booking fees on your initial deal, you will lose it though. My initial ones were fee free. If the rate goes up you keep your initial offer until it expires, AFAIK they can't change the rates once you have their full offer.

From my experience as of now, PO are really fast and the whole process is so easy as you do everything online.

charliexyz

Thanks for the info, I've been checking the rates quite a lot recently and have gotten to know the market quite well, well enough to know the current PO deal is pretty good!