Does First Direct discriminate against Armed Forces?

abijanzo

I posted the text below onto First Direct's Facebook page after a very long and frustrating conversation with their mortgage advisor. I doubt I will get any resolution from them.

Has anyone else had an issue with them regarding mortgages and if so, how do I take this forward?
It goes on a bit so I apologise - but at least it's not as long as the telephone battle I had with them. Here goes...
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Caution - RANT ALERT !!!
First Direct, I fully expect this post to be deleted as soon as you read it, but I thought I would give you the opportunity to answer my questions on your own forum before I take this to the tabloids.



I am a current mortgage customer and also a serving member of the Armed Forces. I recently enquired about porting my (portable) mortgage with some additional borrowing so I can relocate my family closer to my work.



This is where your policy then falls down for a number of reasons:



1. The portable mortgage is no longer portable if I want additional borrowing as the LTV will change. This forces me onto a higher rate mortgage with associated fees.



2. Because I am due to deploy overseas to a far-flung place, FD will not offer a mortgage becase I 'will not be resident in the UK'. The fact that the new property would by my prime residence and my wife and children would be living there in my absence is irrelevant to FD. Note that this is an operational deployment that all Royal Navy/Army/RAF are subject to - it is NOT a holiday or emigrating.



3. This is a real doozie... my current mortgage has 19 years left to run but during my application to port and/or borrow... I'll script this for clarity:



FD: When do you expect to retire?

Me: 70-75 yrs old (I am currently 44 so this gives me a good 2+ years of work)

FD: But you're in the Armed Forces - you retire at 55.

Me: No. I potentially leave the armed forces at 55 or 60, but I will not retire - I will continue to work until state retirement age at the earliest.

FD: Our policy states that you are on a fixed contract and we will not lend for a term longer than that contract period.

Me: So you're telling me that, even though you've askedme when I will retire and what my anticipated income will be after I leave the Forces, you will still not give me a 20yr+ mortgage?

FD: Correct.

Me: That is discrimination against all Serving personnel. Every man and woman who joins the military does so on an agreed engagement period (aka contract). This can range from 6 years to 22 years, although many go on to fulfil a 35+yr career. Given that the longest engagement offered is 22 years, are you saying that no Service personnel are eligible for a 25-year term on their mortgage?

FD: We do not discriminate against Armed Forces personnel, it is just FD policy that we do not offer mortgages for longer than an agreed contract term.

Me: So if I was a bus driver, a mortgage advisor, a doctor or worked in a supermarket, all jobs with uncertain futures in the current climate - any one of them could be made redundant in a few weeks or months, you would offer me a 25-year mortgage based on my state retirement age (or age 75 as per your upper limit), but because I am leaving my current employer - NOT RETIRING - in 15 years or so, you will only offer me a mortgage based on that period?

FD: Yes. That is FD policy.

Me: No. That is discrimination against ALL armed Forces personnel who are all on fixed term contracts.

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There was more to the conversation which I won't bore you with, all of which was recorded and will be referred to in future, no doubt.

So, First Direct. I offer you the chance to answer the above points. Not because I want a mortgage with you - in fact I am voting with my feet and moving my mortgage and all other accounts to another bank as soon as I return to the UK. I offer you the chance to prove that you do not discriminate against Armed Forces personnel - the people who go out and do the nasty jobs in the world so YOU don't have to.
I wait with baited breath....
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I am now at a loss with FD.
I have banked with them for a good few years and had no problems until they effectively tried to railroad me into giving up a good interest rate (my current mortgage is a lifetime tracker flexible offset) and move to one of their other higher priced products, over a much shorter mortgage term. Because of the shorter term the monthly payments increase significantly, resulting in me failing their 'affordability model'.
Any advice gratefully received.

Thrugelmir

Your 2 key points would appear to be

• Ability to port
• Borrow post normal retirement age

Neither are discriminatory in the slightest as will apply to all. Both in fact will be FD lending policy that reflects a culture of affordable and responsible lending together with commercial reality.

Chocolatefund

Hmmm food for thought...

I am also employed in the armed forces, and will be looking to buy later this year.

I have been in for three years now. If I serve the full 22 years, does that mean that First Direct won't give me a mortgage beyond the 19 years technically left?

/boggle.

By that policy they won't give anyone employed in the armed forces a mortgage over 22 years? Lots of people do an 'extension of career' and serve well beyond that.

stephenni1971

As a specialist Forces Mortgage adviser I can say that most mainstream lenders will not take this stance. The age to retirement one is a pain in the !!! and I've only come up across it once before with a small Building Society who wouldn;t give a 25 year mortgage to a Siggy with 19 years left to retirement. I politely told them to stick it,,,

The deployment issue is b+++ocks as you ARE resident in UK when on a deployment. I have done mortgages for guys on 12 month deployments before when they were not even in the country!

There are advisers who specialise in Buy To Let, Adverse Credit, Help To Buy - there are a few like me who work entirely with Forces but not many...

amnblog

Wots a 'Siggy' Steph?

Someone in the Royal Corps of Signals?

audigex

Thrugelmir wrote: »

Your 2 key points would appear to be

• Ability to port
• Borrow post normal retirement age

Neither are discriminatory in the slightest as will apply to all. Both in fact will be FD lending policy that reflects a culture of affordable and responsible lending together with commercial reality.

The latter certainly is, because 55 is not his retirement age, it's just the date he will leave his current employer. That potentially gives him 11 years at his current employer

I sure as hell won't be with my current employer in 11 years. Yet they're perfectly happy to lend to me because my contract has no specific "end" date? Despite the fact I actually have less job security than the OP?

This definitely seems discriminatory.

Landofwood

It's not discrimination.

If the person in the call centre was accurately describing their policy, then it appears that First Direct will only lend for as long as the fixed contract term.

It may seem unfair and may even be dumb, but it's (apparently) their policy.

This is a business decision on their part and nothing else. There are plenty of other lenders.

I assure you no-one will be referring to your recordings.

thenewbee

OP I'm not sure that actually IS their policy as we have a mortgage with FD based on me and my OH'S earnings, and he is on a rolling fixed term contract of 6 months that has been renewed every 6 months for the past 5 years - so if that was their policy we wouldn't have a mortgage. Just wanted to contribute my anecdote.

audigex

Just because it says "Policy" doesn't stop it being discrimination...

I can't just write "The policy of this bar is: No homosexuals allowed" and then kick George Takei out of my pub on the basis of "It's policy"

A disriminatory policy is still discriminatory if it's not applied to everyone equally... as Thenewbee's post would suggest!

betmunch

I think its been a badly worded explanation. The key is going to be their fixed term contract policy.

If that says that if a client is on a fixed term it must be either renewed once or the mortgage term must be no longer than the remaining term of the mortgage then this would not be discrimatory as it would apply to all fixed term contract workers.

Annisele

I think it is discrimination - but that doesn't necessarily make it unlawful discrimination.

Mortgage lenders discriminate all the time. It's perfectly OK for them to discriminate in favour of people with good credit histories who can afford to repay loans. It's not OK for them to discriminate on grounds of, say, sexuality.

Age discrimination is more complicated. Age is a protected characteristic in the Equality Act, but there are a huge number of exceptions. Some of them make absolute sense - no, five-year-old children can't have mortgage loans - and some are a bit more controversial.

So far as I know there's nothing unlawful in discriminating against members of the Armed Forces, but I'm not an expert in this area - and there might be!