Mortgage arrangement fees

jpfrost

I am just coming to the end of my fixed rate mortgages and thinking about getting a new rate.

However, it has just occurred to me that I may have been misled out of around £5000 - unfortunately i didn't think of this earlier!

When I moved house in 2010, I took out an additional mortgage on my mortgage company's recommendation even though I asked for a new single mortgage.

So, I now have 2 mortgage accounts (the original loan and the additional loan)on my house, each with its own different interest rate and fixed rate deal ending date. Every two years for the past 10 years I have re-fixed both mortgages at the lowest rate available at the time - but it has now occurred to me that I have been paying a £999 fee for both accounts whereas if I had been offered a single account in the first place I would have been paying single arrangement fee rather one for each account.

Is this just a case of 'tough luck' or is there anything I can do about this?

[Deleted User]

Financial complaints are subject to 2 rules - the 6 and 3 year rules. 6 years from taking out the product and 3 years from when you knew, or could reasonably have known, that you had cause for complaint, whichever is longer. A product taken out in 2010 would automatically be time barred under the 6 year rule, it is arguable that you would also be barred under the 3 year rule as you would have signed all the paperwork agreeing to the fee and renewing every 2 years. You could try and complain but I would imagine the mortgage company will time bar it and the FOS have no power to overturn that.

penners324

Why didn't you take a deal that didn't have the fee?

Why 2 mortgages? Was it the mortgage ported from another property?

jpfrost

penners324 said:

Why didn't you take a deal that didn't have the fee?

Why 2 mortgages? Was it the mortgage ported from another property?

I was with Nationwide and wanted to stay with them as they had the best deals around at the time. They gave me an additional mortgage when I moved house - which was fine at the time - but i didn't think about the additional fees I would incur each time I took out a new fixed deal for two accounts rather than one.

penners324

They offer mortgage switches without fees....

Only alternative is to let 1 got to the SVR until the other is up for remortgage and choose 1 product for the whole lot.

Exodi

jpfrost said:

penners324 said:

Why didn't you take a deal that didn't have the fee?

Why 2 mortgages? Was it the mortgage ported from another property?

I was with Nationwide and wanted to stay with them as they had the best deals around at the time. They gave me an additional mortgage when I moved house - which was fine at the time - but i didn't think about the additional fees I would incur each time I took out a new fixed deal for two accounts rather than one.

But I'm confused.

I'm with Nationwide and have two mortgages like you (or more specifically, a further advance). Like you, it sounds like one mortgage is a lot larger than the other (my main mortgage is about 4 times the size of the further advance - used to buy my ex out).

Like you, I'm able to renew at my discretion. It has always made sense for me to renew the larger one with a fee (where the mortgage rate makes a big difference on the larger amount) and the smaller one without the fee (where the mortgage rate makes less of a difference compared to the fee on the smaller amount).

Nationwide offer both types of products.

Where I'm lost, is why after 10 years of renewing your own mortgages, you think it is Nationwides fault. Presumably you renewed these through the online mortgage manager?

Exodi

penners324 said:

They offer mortgage switches without fees....

Only alternative is to let 1 got to the SVR until the other is up for remortgage and choose 1 product for the whole lot.

The better alternative would be renewing the further advance on a tracker mortgage, as they don't feature ERC's.

Then as you say, combine both into one product when the main mortgage becomes eligible.

jpfrost

Yeah, I'm not saying it's someone else's fault, like you, I'm able to renew at my discretion, but if, when I took out my further advance, I was offered a new single account rather than 2 separate accounts I wouldn't have been paying 2 product fees every two years. If I'd have gone to another company I would have a single account for the total mortgage amount and I feel that Nationwide should have offered me that option.

Yes I know they offer products without fees but the interest rates are higher.

Just saying.

Exodi

jpfrost said:

Yeah, I'm not saying it's someone else's fault, like you, I'm able to renew at my discretion, but if, when I took out my further advance, I was offered a new single account rather than 2 separate accounts I wouldn't have been paying 2 product fees every two years. If I'd have gone to another company I would have a single account for the total mortgage amount and I feel that Nationwide should have offered me that option.

Yes I know they offer products without fees but the interest rates are higher.

Just saying.

Were you personally renewing these mortgages on the online mortgage manager (I'll assume below)? The reason I ask is this explicitly states disclaimers about the user agreeing to proceed without taking advice.

As a hypothetical, if you were borrowing £1000 from Nationwide, paying £999 for 4.84% instead of 4.99% obviously doesn't make sense. There will be a breakeven point for this, and I think Nationwide provides fee comparisons on their site. Those with small mortgages generally shouldn't go for a mortgage with a fee, those with big mortgages should. Likewise, longer fixes are more attractive with the fee, as it remains constant at £999. Unfortunately it sounds like you've switched your small mortgage every 2 years to a product with a fee - probably the worse case scenario - which is why advice would have been very important.

If it was always cheaper to go with the mortgage with the fee, then there would be little point Nationwide offering one without.

I wouldn't blur the two issues of nationwide not offering an option to merge two mortgages into one on their online portal, and choosing to switch to a product with a fee. You could have chosen to switch to a product without a fee, regardless of whether their website allows you to merge mortgage products.

Plus, even if you did have a case for being misled "out of around £5000" - you have to consider the fact that you would have saved interest due to the lower interest rate so the actual sum is lower.

I really want to sympathise with you, as I suspect it must suck realising you've overpaid to the tune of thousands over the past decade, but unfortunately I think this falls more into the category of personal responsibility. At least you've realised now, and not in another 10 years.

penners324

You could have taken out 1 mortgage product with Nationwide, however, you would have paid an Early Repayment Charge on the current mortgage at that point. Assuming you were still in the deal period.