Nationwide "ported" Mortgage - drawdown facility removed without warning!

drofluf62

We have had a mortgage with the NATIONWIDE for over 20 years with a drawdown facility. Having paid over 100K lump sum into the mortgage about three years ago we 'ported' the mortgage to move house a year ago. We checked at the time of arranging the 'new' mortgage that the reserve remained as we needed to do improvements (central heatng, new windows) to the property and were told absolutely that it would.
Last week we attempted to draw down against it - having already carried out the work (we had after all checked that it was all the same as my previous mortgage) to be told there was no reserve and that that facility is withdrawn when you 'port' the mortgage.
This is disastrous to us. We are now going to have to borrow money (which we never do) to fill the void and find ourselves with 100K trapped in the property. We can only pull it out by paying to remortgage and won't get it at our current rate!
Yes ---- we are Nationwide customers on the Bank of England plus .5% deal! Clearly they want people OFF this deal asap.
Anyone with any further experiences of such events please contact me.
We have already formally complained to the Nationwide but expect to take it to the Financial Authorities after that.
The paperwork issued did not point out the loss of reserve, and in fact refers to the reserve drawdown facility still being there.
We are not idiots and would not have ever done this if we had not been assured the reserve was there. After all, where can you borrow money at 2.5% these days or any others.....
We're devastated and want to see if there are any other such things going on as we don't believe we can be the only ones.

kingstreet

The option to redraw overpayments was withdrawn in March 2010 and new mortgages since then do not have that.

If you took out a new mortgage later than that date, you would normally not therefore have the redraw option.

However, by porting the terms of your existing mortgage to a new one, you should have retained this facility, IMHO.

As you say, your only option is a formal complaint to the lender and escalation to FOS if the response from Nationwide is not acceptable.

FWIW the issue is more about borrowing without new affordability checks than it is about the rate, but that is no help to you.

drofluf62

As you say, it was an identical mortgage - just redrawn on the new property - and thus should have retained the feature UNLESS we were otherwise advised. As we were actually told that it would still be in place this is probably fraud of some sort?
Additionally we could have simply drawn down the entire reserve - our financial position better than when we took out the mortgage AND we also had overpaid a further sum earlier - and this situation would not have occurred.
Had we been advised of the change it would be entirely different.
We intend to take it all the way. We are somewhat scuppered unless they reinstate what is in effect our low rate loan.

kingstreet

Indeed.

Usual advice is to re-draw before repaying the existing mortgage to ensure as much as possible is offered on the BMR.

mike_the_bike_2

I take it you have a copy of the original mortgage agreement which contained all the terms and conditions relating to your contract with the Nationwide. I stand to be corrected but I would be very surprised if in the small print it did not talk about the portability of the mortgage and whether this was permitted or not..

Unfortunately in my experience these financial institutions normally have these things all buttoned up..

I'm guessing your "when you asked" was a verbal conversation as opposed to in writing?

Sobewannabe

I am in the process of porting my existing BMR mortgage and taking out additional funds. I like you had a large overpayment reserve. I was advised to draw out the reserves and thus put the BMR mortgage back to its highest point. Then the application was submitted. On my mortgage offer now it lists two different products and the "additional features" available to each part. My offer clearly states that these additional features are only available on "part 1" of your mortgage.

I would suggest you pull out your mortgage offer and see what it says as it would be this document you can use as a bargaining point. As previously said Nationwide will be very succint in their process and in their offer to you which of course they will caveat with the assumption that you read what you signed or queried anything you weren't sure about.

Thrugelmir

drofluf62 wrote: »

As you say, it was an identical mortgage - just redrawn on the new property -

Contractually unlikely to be identical terms and conditions. As revisions are constantly made in order to comply with current legislation and regulation.

Porting will confer the same rate of interest. There's no guarantee of anything else.

haras_nosirrah

when we moved in 2009 we had 10k in overpayment reserve with Nationwide

we were told to withdraw the 10k and then pay it in again after we moved to still have the 10k in the overpayment reserve. I think when you move you still have the overpayment and drawdown (i.e. if you paid in 100k now you could draw it back) but anything paid in before the port cannot be accessed.

Thrugelmir

drofluf62 wrote: »

Yes ---- we are Nationwide customers on the Bank of England plus .5% deal! Clearly they want people OFF this deal asap.

Commercial suicide if the NW were to do so. The NW is under pressure to raise capital to comply with tougher regulatory requirements.

Make the most of the exceptional BOE base rate. As it won't last forever.

drofluf62

I have checked (again) both the initial mortgage and the current one. In essence they remain the same. The only part that refers to porting is that they 'may vary the terms' the only bit remaining in place will be the 2% above base rate. But remember, we asked the question about the drawdown and it was answered in the affirmative.
I find it somewhat bleak that none of you who have kindly answered seem to see anything wrong in a High Street Lender lying to a customer and stuffing their financial planning to this degree (both my husand and myself were there - he a financial services professional himself; I a former finance and business journo and we're both somewhat careful with detail too)
I think it's clear that Nationwide are trying to get people off these deals. We shall pursue the case as we cannot see anything that suggests we could have known about this change in conditions beyond our verbal conversation.

kingstreet

drofluf62 wrote: »

I find it somewhat bleak that none of you who have kindly answered seem to see anything wrong in a High Street Lender lying to a customer and stuffing their financial planning to this degree

I told you my opinion and how you should go about remedying it.

If it makes you feel better me talking about "big, bad mortgage lenders," I can do that, but it's just wasted pixels, IMHO.