Fee added before the rate begins?

Mishomeister

I just did the switch with for my HSBC mortgage and there was a product fee of £750 which I chose to add to the mortgage.


The new rate is only to kick in from next month but the fee has already been added to the mortgage.


Is this the usual way for HSBC to do it like this?


I don't understand why I should now be paying an interest at the old higher mortgage rate on the fee, before I am even able to benefit from the new better rate.


This is like when you buy something on credit and you start being charged for it even before you get the good.


I know this is not likely going to be a considerable amount but if they do this with everyone, and they allow to secure the rate 3 months in advance, on overall they are making a nice few quid by not making it clear.


It is probably buried somewhere in a small print and I am happy I did not secure the rate earlier.

amnblog

Nice touch from HSBC.

TrickyDicky101

That's a bit sneaky isn't it? OP ask to make a formal complaint to HSBC outlining what you've said here. Expect HSBC to do a swift about turn and make an offer (albeit not a very big one) for you to withdraw your complaint (eg before you take it to the FOS once HSBC have reached a decision/the expiration of 8 weeks from making the complaint - whichever is the sooner).

davidmcn

TrickyDicky101 wrote: »

That's a bit sneaky isn't it? OP ask to make a formal complaint to HSBC outlining what you've said here. Expect HSBC to do a swift about turn and make an offer (albeit not a very big one) for you to withdraw your complaint (eg before you take it to the FOS once HSBC have reached a decision/the expiration of 8 weeks from making the complaint - whichever is the sooner).

Seriously? We're talking about pennies here, aren't we?

Amst

TrickyDicky101 wrote: »

That's a bit sneaky isn't it? OP ask to make a formal complaint to HSBC outlining what you've said here. Expect HSBC to do a swift about turn and make an offer (albeit not a very big one) for you to withdraw your complaint (eg before you take it to the FOS once HSBC have reached a decision/the expiration of 8 weeks from making the complaint - whichever is the sooner).

If you genuinely believe HSBC (small independent company :doh:) haven;t checked with the FOS on operational procedures before introducing it to something which could affect thousands of their customers then I have some magic beans you are welcome to buy.

These companies don't 'sneak' things in. If I was a betting man I'd offer 1000-1 that a complaint would get nowhere with the FOS in respect of this - largely as, if it is mentioned in the T&C's, they've done nothing wrong!

TrickyDicky101

TrickyDicky101 wrote: »

That's a bit sneaky isn't it? OP ask to make a formal complaint to HSBC outlining what you've said here. Expect HSBC to do a swift about turn and make an offer (albeit not a very big one) for you to withdraw your complaint (eg before you take it to the FOS once HSBC have reached a decision/the expiration of 8 weeks from making the complaint - whichever is the sooner).

Yep - standard redress from HSBC for such amounts (based on my experience) is £25. The cash is neither here nor there in my opinion (as it isn't exactly life changing) but if the OP wants to complain to <someone> this is the route to go down. And it is naughty of HSBC whether it's £1 or £5000.

TrickyDicky101

Amst wrote: »

If you genuinely believe HSBC (small independent company :doh:) haven;t checked with the FOS on operational procedures before introducing it to something which could affect thousands of their customers then I have some magic beans you are welcome to buy.

These companies don't 'sneak' things in. If I was a betting man I'd offer 1000-1 that a complaint would get nowhere with the FOS in respect of this - largely as, if it is mentioned in the T&C's, they've done nothing wrong!

HSBC will ensure this doesn't become a complaint to the FOS - not good for the KPIs (irrespective of what the outcome from FOS might be).

Amst

TrickyDicky101 wrote: »

HSBC will ensure this doesn't become a complaint to the FOS - not good for the KPIs (irrespective of what the outcome from FOS might be).

Paying £50 for a complaint to avoid going to the FOS makes financial sense as it will cost them £500 irrespective of who wins if it proceeds. This doesn't mean they are admitting they are in the wrong.

kingstreet

When you apply for a purchase mortgage, you can pay the product fee upfront and you don't actually get the rate for maybe three or four months until completion.

How is this different? You pay the fee, you secure the rate...

Was there an option to pay the fee upfront?

Mishomeister

kingstreet wrote: »

When you apply for a purchase mortgage, you can pay the product fee upfront and you don't actually get the rate for maybe three or four months until completion.

How is this different? You pay the fee, you secure the rate...

Was there an option to pay the fee upfront?

The difference is that you don't pay the interest on the fee, where in my case it appears that I will be charged the interest on the fee before I have started the new rate.
It is technically now an ammendment to my initial mortgage offer as the fee.was added to the old deal even though the fee was agreed to be added for the new mortgage which starts 1 November.

Mishomeister

kingstreet wrote: »

When you apply for a purchase mortgage, you can pay the product fee upfront and you don't actually get the rate for maybe three or four months until completion.

How is this different? You pay the fee, you secure the rate...

Was there an option to pay the fee upfront?

When you apply for a purchase mortgage with HSBC or remortgage from another bank to HSBC and elect the fee to be added to the mortgage the fee will only appear on your mortgage when the purchase/remortgage are completed and not a second earlier. I don' t see the reason why it should be different with the rate switching applications.