Mortgage Offer With Unexpected Interest Rate

r1ckh0ward

I have just received my formal mortgage offer from Natwest and the rate offered is not the one that we applied for. All throughout the application process I was quoted 2.6% for a 3-year fixed based on 75% LTV, yet the mortgage offer is for 3.29%. At no point did they inform me that the rate I could expect would not be the one I applied for. They now want to charge me a £150 'admin fee' if I decline the offer.

This hardly seems fair to me. If I knew they were offering 3.29% then I would have not proceeded with the application as I could have got a much better deal elsewhere. This is a considerable increase and will cost me over £3,500 over the life of the fixed rate period. It seems like they are trying to force into much worse deal than I was expecting. They have also wasted a lot of my time by processing an application that I don't want. My offer on the property was accepted on the basis of a quick sale and starting the mortgage application process again could jeopardise the sale going through.

Could anyone tell me what my rights are and what I can do?

Thrugelmir

Did you check that the product was still available before making the full application?

kingstreet

What was the rate on the Key Facts Illustration on which you decided to proceed?

What rate is printed on the application form? If you do not have one, request a copy.

Did you do this direct with the lender, on an "execution-only" basis, or use the "advised" route via a broker?

r1ckh0ward

In answer to your questions:

I used a mortgage broker and they recommended this mortgage based upon an assessment of my needs. This is annotated on my Key Facts form.

The Key Facts also clearly state that "this illustration is valid on the date produced".

Also listed on the Key Facts is the fixed rate of 2.6% until 31 July 2017 based upon a maximum of 75% LTV. Also listed are the monthly payments which are nearly £100 lower than the ones offered.

I don't have a copy of the application form, but I will request one. Surely if these Key Facts change they have a responsibility to inform me so that I decide whether or not to continue with the application?

Thrugelmir

When was the application form submitted?

kingstreet

The deal on the KFI, the deal on the mortgage application and the deal on the mortgage offer should all match.

I suggest you ask your broker the reason for this. Simply ask them why the product on the offer differs from that on the KFI.

TBH I always produce a new KFI on the day the mortgage application is submitted so I can evidence that the deal was available on that date.

StuC75

What has the valuation come in at? is it outside of the 75% LTV and so a change in product / rate paid without you covering the shortfall??..

Other than that question why the mortgage doesn't match the KFI.. what was on the paperwork you completed (do you have a copy) \ can your request they check the paperwork completed - its possible the Product Code was mis-keyed?...

r1ckh0ward

The valuation came in exactly the same as the offer that was accepted on the property and exactly the same as on the mortgage application. Therefore, there was no change to the LTV.

ACG

Is it the same deal on the offer?
ie same LTV, same term, is it still a 2 year fixed rate or 3 year fixed rate for example?

It could be that for whatever reason it has changed from a 2 year to a 3 year fixed rate and switching it (back) tot he 2 year will sort it out.

You need to go and speak to your broker, let them know the offer is wrong and let him/her sort it out.