Part buy part rent re-mortgaged higher then

williom

Hi
This year I remortgage with same bank fix for 2 years, initially they gave me very good rate but as soon I was about to finalise they said , we made mistake, due to you being partly owner and renting this property partly , your rates will be higher,
I was surprise why we as partly owner have to pay higher interest rates? I had to agree on this due to I didn’t had time and no other choice on that time,
Any positive thoughts on this, why this discrimination high rate etc? Is there any legislation back us on this,

foxy-stoat

Did you have to re-mortgage? You could of just gone onto their variable rate for a month or 2 so you can get a better deal.

I dont think its discrimination, just the lender's terms - but you could argue that they knew about the part renting arrangement as they were the ones who gave you the mortgage in the first place, unless they made the same mistake then also in which case you saved money on originally.

sal_III

Can't comment on why the rate might be higher in your case, maybe that they used the wrong LTV in the first calculation.

But there can be no case of discrimination, it's free market, if you don't like the deal you are free to find another lender.

kingstreet

The term you are looking for is "shared ownership" and it is viewed as a more risky prospect for lenders because if you decide not to pay, the lender has to buy the remainder of the property from the RSL which owns the other portion so it can sell on the open market.

As a result, the rates offered are not as good.

Existing customer retention rates are then not as good as remortgage rates which are offered to borrowers new to that lender.