Mortgage arrangement fee

EchoFalls_2

After 3 years, in December 2006 our mortgage was due for review, leaving us free to shop around for the best deal. My partner was encouraged by 'loyalty' products offered by our existing mortgage provider, Nottinhgam Building Society (NBS). I basically left it with him as he always has sound financial sense. He settled on a fixed rate product offered by NBS. We received the documents agreeing to a fixed rate mortgage. As usual, we're always so busy, therefore I signed the documents without really checking them, expecting the best deal as an existing customer. However I was horrified to realise the arrangement fee had been £495! This has caused me a great deal of distress; some loyalty product. I was particularly angry as my bank Natwest had offered the same fixed rate terms, with no arrangement fee as a first time mortgage account and I held an Advantage Gold account. The building society refuse to review the situation, - as we signed the agreement, and my fella sent the cheque (which has caused many tantrums on my part). NBS have confirmed in writing their final offer that they are not prepared to refund the amount, their correspondence has bordered on arrogance stating the arrangment fee is not covered by the legislation introduced by the FSA.Is there anything I can do, shall I refer it to the FSA or the Ombudsman, or shall I just have to accept that we really have been ripped off?

dwsjarcmcd

No your not being ripped off. Arangement fees are part of the pricing of the product. NBS have done nothing wrong, particularly if you choose not to read the information you were provided with.Sorry but your issue, not theirs.

dunstonh

You havent been ripped off. You knew the costs from the start. The deal you have is probably cheaper than the standard variable rate therefore saving you more than the £495 arrangement charge.

Arrangement fees for fixed rates have been in place for decades so its not something new and you went into this with your eyes open and figures known. Your solicitor would have pointed it out to you as well (if you used one).

shall I refer it to the FSA or the Ombudsman

FSA wont deal with you as they do not handle complaints and the bank has done nothing wrong. The FOS will pass your complaint back to the bank as they only handle complaints after you have hit an impass with the bank and the bank gives you the FOS details as they are not willing to budge.

The FOS wont be much use to you either and you will be wasting everyone's time and money.

EchoFalls_2

Thanks for the info both of you, feel loads better to share your thoughts knowing the fee was standard, and yes I should've checked, but still do feel 'raw' that our loyalty wasn't appreciated. It is our fault and have today made arrangements to move the mortgage.

MarkyMarkD

How do you reckon your loyalty hasn't been recognised? You've managed to get a rate as good as you could get elsewhere as a new customer, and you've only had to pay £495 to switch products.

As Dunstonh pointed out, you will be saving oodles more than that £495 compared to paying the SVR rate which is what you originally agreed to go onto when you took out the mortgage.

Lenders don't have to let you switch product at all.

EchoFalls_2

Our existing mortgage was tied in for three years, leaving us free to shop around in 2006, which the BS kindly pointed out. I get your point about saving, but as stated we were offered the same product by my bank, with no arrangement fee. Thanks for sharing your thoughts though, as I said previously, do have a clearer picture on the subject.

TwelfthMan

EchoFalls wrote: »

Thanks for the info both of you, feel loads better to share your thoughts knowing the fee was standard, and yes I should've checked, but still do feel 'raw' that our loyalty wasn't appreciated. It is our fault and have today made arrangements to move the mortgage.

So you've paid a £495 fee for a preferential deal and are now moving the mortgage elsewhere while still in a tie in period (presumably with ERCs?) and likely to be on a higher rate since rates have increased numerous times since December 2006???

marie_e

After reading the article in money saving expert i rang the royal bank of scotland, asked for the overpayment to be returned. I couldn't remember how much I originally paid but knew if was around £220. (paid of my mortgage around two years ago) No hastle whatsoever and had £150 returned to me within a week!!! great result. Thanks for the advice

MarkyMarkD

Erm, wrong thread, marie. But welcome to the site!

I will ask the board guides to move your post.

MarkyMarkD

TwelfthMan wrote: »

So you've paid a £495 fee for a preferential deal and are now moving the mortgage elsewhere while still in a tie in period (presumably with ERCs?) and likely to be on a higher rate since rates have increased numerous times since December 2006???

As Twelthman says, what you are proposing doesn't make any financial sense.

toonfish

MarkyMarkD wrote: »

As Twelthman says, what you are proposing doesn't make any financial sense.

bizarre in the extreme