Wrong mortgage - C&G want to change and charge more

happy_clapper

Hello
A bit of a strange question but hopefully someone may have an answer........

My husband and I took out a BTL mortgage with G&C back in 2009, we went into our local Lloyds bank (where we had our residential mortgage) and asked for BTL mortgage. The man was very helpful and we showed him the sort of rental properties we wanted and he sorted the rest out.

This year we looked at putting mortgage in my husbands name only and have now been told by C&G that we don't have a BTL mortgage but a normal residential mortgage. They have told us that they will let us keep this for 12 months but then we will have to switch to BLT and pay higher rates.

Should we just count ourselves lucky that we had a cheaper rate for 5 years or, as this is their error, can we say we want to stay on our current agreement and rate? (now 2.5%). I have a horrible feeling it is going to go up a lot!!!

Any views on this would be welcome ?:)

amnblog

This is a new on on me - what does your original mortgage offer say?

happy_clapper

Hello amnblog

It didn't mention BTL just a mortgage account number but as this was our first BTL mortgage I didn't take much notice. I was thinking of asking for copy of notes/records made during the mortgage discussion in the bank (under the Freedom of Information Act). I remember it clearly because the mortgage advisor we spoke to told us that he had a few BTL properties as well and gave us some advise on what to look out for. It looks like he set it up as a sub account to our existing residential mortgage and they charged us a rate of 4.09% back in November 2009 (2year fixed) and now 2.5% We did everything above board so it seems a bit unfair.

amnblog

I cannot guess how this will run.

I suspect you have little to gain as they will say you have benefitting from an artificially low rate for some years.

Might be better just to let low an continue as you are - worth getting a copy of the file so that you have proof they were informed of property use at outset.

Interested as to what others may think.

kingstreet

Is this mortgage secured on the target BTL property, or is it secured on your main residence?

The appearance of the words "sub-account" makes me think you had an increased residential mortgage, not a separate BTL mortgage on the other property. This would have produced a lower rate.

BTW FOI is for Government departments etc. You need to make a Subject Access Request under S7 of the Data Protection Act.

amnblog

kingstreet wrote: »

The appearance of the words "sub-account" makes me think you had an increased residential mortgage, not a separate BTL mortgage on the other property.

Good point KS, but if this were the case, why would the Lender now be saying it should be switched to buy to let? Sounds like miscommunication.

happy_clapper

Hello Kingstreet
I know I probably should know the answer, but I'm not sure. Do you think it would make a difference? we have paid off our own residential mortgage now but just have this BLT property mortgage or at least that is what we thought we had. Thank you for correction FOI, I will make sure I ask for a subject access request and see what their records show in respect of our initial conversations with their mortgage man. Thank you

kingstreet

Does the residential mortgage have a different account number to the alleged BTL mortgage?

AFAIK if done as a residential sub account, it would have mostly the same "50000" number. If done as a BTL it would have a different "50000" number altogether.

happy_clapper

The statement I for the 'BTL' mortgage starts with 50000 but has a completely different ending to our residential mortgage The statement also has mortgage sub-account 01 on it. We also had a sub account 4 (again starting with a 5000 number) and I think this was the 40% deposit re-mortgage that we took out on our residential mortgage for the deposit for the BTL property. the BTL deposit was repayment and we have paid this off now and only have the 60% BTL part on a repayment basis. which is the one they say is on the wrong policy.

happy_clapper

I have found the mortgage loan agreement now and it clearly states that the loan is secured against the BTL address and they have typed the BTL address.

happy_clapper

We paid £995 to set up this account, so again assumed this was for a separate BTL account.