Nationwide have me over a barrel :(

sniperpenguin

OK, the basics first

1. Mortgage with NW (Just under 90K left of a 106K Mortgage)
2. Property valued at 115K
3. Currently on the BMR (2.7%) and not tied to a deal.


Heres the issue, just finishing a very amicable divorce and as a result the property is now in my sole name. I can afford the payments but fancied a new start elsewhere, so started looking into "Consent-to-let" so as to keep the property..

I was stunned at how high NW charges were (1.5% hike on the APR, costing about £90/mth!!!) compared to the other ones I investigated (First direct, free.... Santander - £200 one off).

I kinda now feel stuck - Selling up would leave me with almost nothing after costs, and trying to transfer mortgage would end up with a higher likely rate - Have I got any other option? :mad:

mollyjester

I haven't worked in mortgages for a while now but based on past experience I would agree you are over a barrel.

Maybe worth speaking to a mortgage broker to see what options you have possibly but legally you would be in breach of your mortgage conditions if you let on your current mortgage and generally buy-to-let mortgages do entertain higher rates basically because they are higher risk. A know that a number of the mortgages I have dealt with had sub let clauses - bad news!

You are unlucky in that other lenders offer the deals and Nationwide doesn't but I am not convinced that there is anything you can do other than move and try to reduce the hike in rate the best you can. Perhaps you could raise your concerns formally to Nationwide (making it clear you will leave/move the mortgage) and see what they say based on the comparisons but I wouldn't hold my breath as I sense the contract argument (you agreed to the terms when taking out the loan) may be used - you never know?

Thrugelmir

You are only "over a barrel" as you wish to retain the property rather than selling. That's entirely your decision. The NW are actually under no obligation to offer you CTL at all. As it's not a borrowers right.

PaulLuke

I'm in the same position insofar as I'm paying a 1.5% additional rate on an NW mortgage with CTL.

However, this is purely the cost of having a rental business and the rate you'd end up paying is pretty comparable to the rate you'd pay on a standard BTL mortgage. Although, in your case it looks like you probably don't don't have enough equity in the property to get a normal BTL mortgage.

From your comment I'm not sure you realise this but it is very likely your NW mortgage is portable so you could move to a new property and retain the BMR rate on up to the current balance on your mirtgage. Would that be an option you could explore?

In my case I'm consideing taking out a true BTL on the original house, with a view to porting the NW mortgage to my current residential property as that would give me a better rate on this house.

dimbo61

The interest you pay on your rental property is tax deductible from the profit you make from running a business. IE renting out the property.
Many BTL mortgages have rates higher than 4% and big fees to set up.
There is a much bigger risk of defaults in BTL properties so either accept the Nationwide deal or sell up/ change to a BTL mortgage.
Give a " whole of market mortgage broker " a call.

Thegirl

You should be able to take the mortgage with you. I'm with Nationwide, as an existing customer they offer a favourable deal for a new mortgage, mainly to get people off of the low base rate mortgage I imagine.

Wh05apk

You are pretty much stuck with N/W, you have not got enough equity to be able to remortgage to a BTL, even if you did the rates would likely be higher.

Once again, this is Nationwide being the "cuddly friendly" building society rather than a money grabbing bank (most of which charge less for CTL!)