Natwest tricked me into staying with them

fokwok

I recently took out some extra borrowing on my mortgage to consolidate some debts. I did this with Natwest in January 2018 and there is a 5 year fixed term on it. This is on top of my original mortgage which is due to expire/come for renewal at the end of September.

My problem is basically set out below:

Main mortgage with Natwest - £157k remaining – can be renewed at any time
Additional borrowing against the mortgage with Natwest - £12k – cannot be reviewed until January 2023 – has a £520.00 penalty for early repayment

I was very naïve when I took out the second mortgage/additional borrowing and assumed, with it being a low amount, I could still move the ‘main’ mortgage when it is due for review and the smaller one is just considered a loan. When I tried this last month with a broker they informed me that I would have to transfer both the main and additional borrowing.

Now I am at the point where I need to remortgage I am at the point where I want to move mortgages as there are several lenders who have far better deals (I will be able to cut my term by 5 years and still pay less than what Halifax would offer me just for the main mortgage). However, if I do this then I have to pay the fee for the smaller mortgage. If I stay with Natwest then I would have to take out 2 x year deals with them consecutively just to get my mortgages to align so I could move them together without paying any fees.

I have definitely learnt my lesson in relation to this but I am also stuck on where I stand. I believe that I have been mis-sold this second mortgage by Natwest who have failed to consider the bigger picture (as I should have) by looking at my current borrowing and providing advice. An additional point:

At no point during the additional borrowing chats did Natwest provide any advice or indicate the implications in re-mortgaging my main mortgage – they also admitted over the telephone that they do not discuss the larger existing mortgages when they go through the additional borrowing process – they simply look at affordability.
I think it is unfair, immoral and bad practice not to consider a bigger picture in this situation being that for future mortgages the customer is either forced the stay with Natwest meaning that they cannot shop around or they would have to pay a fee. The additional borrowing mortgage is effectively forcing you into staying with Natwest.

Any thoughts, other than complaining (still awaiting the outcome before I potentially go to the Onbudsman) of anything I can do? Any caselaws?

Typhoon2000

All seems completely normal to me. BTW you only ever have one mortgage, but you may have one 2 or more accounts. If you want to move the one mortgage you have to another lender, you have to repay all your accounts inorder to pay your mortgage.

davidwood681

The person responsible for your situation is yourself.

Take it on the chin, admit you made a mistake/didn't understand the situation and move on with your life.

kingstreet

Did you seek independent advice on how to source the debt consolidation finance you needed, or did you only approach NatWest a lender offering only NatWest products?

Any reason for approaching a broker now and not then?

Did NatWest advise you of the risks in securing what had been unsecured debt on your home and how the longer term would increase the amount you would pay overall?

Did you discuss, or were you offered other options such as an unsecured loan, or did you request a further advance? Were options such as standard variable rate with no early repayment penalties discussed with you as an alternative to the five year fixed rate? How did the selection of a five year fix come about?

fokwok

i was advised about the individual smaller loan, but i now essentially have to either take the larger mortgage with Natwest at a really uncompetitive price, or pay a penalty to leave the smaller mortgage (thankfully only about 500).
I accept my i should have looked into this, i accept the irresponsible behaviour on my part, but surely this is something that you should be advised when you take out any borrowing like this. Natwest are essentially guaranteed to have the larger of the mortgages to stay with them for the duration of the smaller mortgage, or for the customer to pay a fee to leave.
I think that it is this part which is wrong on Natwest's behalf and should be made very clear to someone taking out any additional borrowing on their mortgage.

in answer to some of the questions. i was under the impression that whilst the smaller amount was essentially additional borrowing, that i could still move the larger amount. the term given was the best deal available to us at that time to have minimal disruption and free up other finances.

we really needed to consolidate some debts. thankfully, due to no more child care fees, student loan being paid off, we have significantly more money to live off.

Back to my point though, there was no advice provided of the implication of this additional mortgage borrowing on the larger mortgage - specifically what our options would be when our larger mortgage was up for renewal - which they knew was up for renewal in 8 months. it seems like a very sneaky tactic to either secure future mortgage customers or to secure penalty fees.

fokwok

not a helpful response

dunstonh

but surely this is something that you should be advised when you take out any borrowing like this.

And did you seek advice from an IFA or mortgage broker? Advice is only given when it is sought. The banks are really just order takers.

Nick_C

"Natwest tricked me into staying with them"

They didn't. They really didn't.

And you don't have to stay with them. Do the maths. It might be cheaper to pay the early redemption fee and move. At least everything will be in alignment.

getmore4less

What rates and term are you talking about?

eg £157k 30 years say 75% LTV

Halifax 5y fix is 2.89% £653pm

To knock 5 years off that need a rate of under 1.84% saving £39k of interest

adding the £500 ERC put the cost up £2pm or around £600 with interest.

bigisi

fokwok wrote: »

not a helpful response

You might want to learn how to quote otherwise replies like this make no sense whatsoever. Practice on me seeing as you probably think this is "not a helpful response" as well

mcpitman

Natwest didn't make you stay with them, you chose to do that.


Did Natwest make you run up the debts to then consolidate? No, you did that.


Was the ERC clearly stated in your T&C's for the additional borrowing? Yes


Did you read the T&C's? Probably not.


Your mistake for not understanding the implications of the debt you happily and willingly signed up for.


Not NatWest's fault. Take some ownership.


The above post is not helpful, but is probably truthful.