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Nationwide mortgage - advised to take 2 products
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svetep
Posts: 1 Newbie
Hi all,
A few months ago I decided to sell my flat and buy a bigger property. I had an existing mortgage with Nationwide with around 8 months left on the promotional contract. When I phoned them and went through the process of getting a new mortgage, the advisor convinced me to take out a 2nd Mortgage product, instead of closing the current one and taking a new one. Her motive was that I would save the redemption penalty this way (around 1200 £). I already was prepared to pay the penalty and tried to resist that at first due to the fact that I didn't want to deal with 2 separate products over the long term, but she really pushed her way (saying - why wouldn't you want to save 1200 £) and I ended up going for the 2 products. A few months later, I'm trying to get a new promotional contract on the existing product and I discovered that if I want the same interest rate as the new one, I need to pay the product fee (999£) again!! I phoned them and realized that this will be the case going forward - each time I want to change the contracts, due to the fact I have 2 products, I will need to pay 2 product fees. Needless to say I was pretty upset with this and raised a complaint, because ultimately those 1200£ I was supposed to save will amount to much more in product fees.
Has anyone else had this issue and what did you do?
A few months ago I decided to sell my flat and buy a bigger property. I had an existing mortgage with Nationwide with around 8 months left on the promotional contract. When I phoned them and went through the process of getting a new mortgage, the advisor convinced me to take out a 2nd Mortgage product, instead of closing the current one and taking a new one. Her motive was that I would save the redemption penalty this way (around 1200 £). I already was prepared to pay the penalty and tried to resist that at first due to the fact that I didn't want to deal with 2 separate products over the long term, but she really pushed her way (saying - why wouldn't you want to save 1200 £) and I ended up going for the 2 products. A few months later, I'm trying to get a new promotional contract on the existing product and I discovered that if I want the same interest rate as the new one, I need to pay the product fee (999£) again!! I phoned them and realized that this will be the case going forward - each time I want to change the contracts, due to the fact I have 2 products, I will need to pay 2 product fees. Needless to say I was pretty upset with this and raised a complaint, because ultimately those 1200£ I was supposed to save will amount to much more in product fees.
Has anyone else had this issue and what did you do?
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Comments
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Usually lenders have 2 products - a higher rate with no fee and a lower rate with a fee.
If each part of your mortgage is under sort of £100-150k, it is probably cheaper to pay the higher rate without the fee.
Difficult to say for sure without all of the figures, but it does sound like you have been given dodgy advice (assuming it was advised). See what happens, the way you describe it seems like it is a formality and they will uphold your complaint.
I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.2 -
It's just poor advice if she didn't alert you to the cons of having your mortgage in two parts.1
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Without the numbers it won't be clear which option was best.
With those you can quantify losses if the advise was wrong
Need details
ported mortgage (amount, rate, payment, full term) (we have, 8months left £1,200 ERC on that one)
additional borrowing product, same details.
LTV of new property at purchase time.
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