Mortgage help with costs tie in

ashanat

Hi,

We have a mortgage with the Northern Rock, at the time we took out the fixed deal we opted to pay a slightly higher interest rate and get £1k help with costs.

The fixed rate ended and went up to variable, so I attemted to move it - only to be told that up until 18 months later we still had to pay back the £1k help with costs. I can understand the principle, to retain our business, however we were going to stay with them.

My main question is, because we got this £1k and paid a slightly higher interest rate for the privilage - do they have the right to require us to pay it back like this?

Has anyone had a similar experience or been able to change product without paying back? It just doesn't seem right when we paid a higher rate.

Rick62

Do you have a copy of the original Offer document? Did you arrange the mortgage yourself or through a broker? In my experience NR clearly lay out the terms. I agree its not a good offer, why pay more for a rebate that either ties you in for 18 months or has to be repaid? I would never recommend it (its fine if you are taking a 5 year fixed, but not on a 2 year). But assuming the terms were set out correctly in the offer I don't see that you have much chance.

AndrewSmith

ashanat wrote: »

Hi,

We have a mortgage with the Northern Rock, at the time we took out the fixed deal we opted to pay a slightly higher interest rate and get £1k help with costs .

The point being that 'you opted'. The choice was yours to make and you chose to take that product.

The fixed rate ended and went up to variable, so I attemted to move it - only to be told that up until 18 months later we still had to pay back the £1k help with costs. I can understand the principle, to retain our business, however we were going to stay with them.

This would have been clearly outlined in both the original KFI quote you received and your mortgage offer.

My main question is, because we got this £1k and paid a slightly higher interest rate for the privilage - do they have the right to require us to pay it back like this?

They have every right as by completing on the mortgage and becoming a customer you are accepting and agreeing to the terms and conditions within the mortgage offer relating to the product 'you opted' for.

Has anyone had a similar experience or been able to change product without paying back? It just doesn't seem right when we paid a higher rate.

If you didn't think it seemed right then you shouldnt have taken the product in the first place. It is your responsibility to read the terms an conditions of the mortgage offer prior to legal completion of the loan.

Mortgage products are costed in advance. Any benefit received by the borrower is carefully weighed up against the profit for the lender. The extra tie in period and slightly higher rate mean that the lender is able to offer assistance with costs and fees, something which I guess you were happy to accept at the time. They are, after all, just like any other retail outlet and have profit margins to make. They are not charities.

As the details will have been clearly stated in the mortgage offer you accepted you have no chance of getting out of either staying with them on SVR or paying the costs back. Pointless to tell you otherwise as that would merely patronise you.

mrnomoneybags

Yup we got a £750 help with costs, we didnt even want it.

They tie you in for 6 months past your fixed rate.

My advice...... pay the £1k and run for the hills away from NR

AndrewSmith

Tomlewis007 wrote: »

Yup we got a £750 help with costs, we didnt even want it.

They tie you in for 6 months past your fixed rate.

My advice...... pay the £1k and run for the hills away from NR

If you didnt want it then dont take it.

Northern Rock run 2 identical products side by side. 1 has help with costs and an extended tie in, the other has no help with costs and no extended tie in. You always, as the borrower, have the choice of taking the product or not.

kingkano

Tomlewis007 wrote: »

Yup we got a £750 help with costs, we didnt even want it.

They tie you in for 6 months past your fixed rate.

My advice...... pay the £1k and run for the hills away from NR

Not if you get a 5yr fixed product. Im sure your free to take another fix off them without paying the charge either.... it was all there when you signed tho? if you didnt want it why didnt you say so?

dwight-van-man

Just to clarify, Help With Costs for a purchase does still carry a 36 month erc (18months for remortgages) but if you are looking to stay with NR after the mortgage deal finishes, you can take HWC again. So if you end up paying back the £1000 at the end of a 2 year deal, you would get another £1000 on a Together deal (or £750 on a standard) but still with the 36 month tie from completion of the new deal.

kennyboy66_2

ashanat wrote: »

Hi,

We have a mortgage with the Northern Rock, at the time we took out the fixed deal we opted to pay a slightly higher interest rate and get £1k help with costs.

The fixed rate ended and went up to variable, so I attemted to move it - only to be told that up until 18 months later we still had to pay back the £1k help with costs. I can understand the principle, to retain our business, however we were going to stay with them.

My main question is, because we got this £1k and paid a slightly higher interest rate for the privilage - do they have the right to require us to pay it back like this?

Has anyone had a similar experience or been able to change product without paying back? It just doesn't seem right when we paid a higher rate.

I bet you are sorry you asked.

How long do you have to wait before you are free of this penalty and how much is your mortgage?

mrnomoneybags

AndrewSmith wrote: »

If you didnt want it then dont take it.

Northern Rock run 2 identical products side by side. 1 has help with costs and an extended tie in, the other has no help with costs and no extended tie in. You always, as the borrower, have the choice of taking the product or not.

I wasnt given the option from my mortgage broker....... looking back i should have looked for another broker but i would have lost the house..... now we have £25k equity after 2 years.....

AndrewSmith

Poor show by the broker, their range has both options I can assure you, same product just one has help with costs and extended tie in, the other has no help with costs but no extended tie in.

Good for you on the equity you have now gained :beer: