Refusal of mortgage product transfer

Sunnyhols

My husband and I have three mortgages:

 

A personal mortgage (C&I) with the Yorkshire Building Society, taken out in 2003.

A buy-to-let mortgage (interest only) with Birmingham and Midshires, taken out in 2007.

A buy-to-let mortgage with the Cheltenham & Gloucester, taken out in 2008.

 

All three of which now have a relatively low loan to value.

 

We have always been really careful to keep our personal mortgage on a fixed rate as we knew it could cripple us financially if interest rates increased substantially. 

The buy-to-let properties were taken out on variable rate trackers with the intention of changing them to fixed rate products if rates were to begin to rise in the future. 

 

In February of 2022, the fixed rate product on our personal mortgage came to an end. We decided to take out another fixed rate, and decided that the time was right to change the tracker mortgages to fixed rate products as well. 

 

We knew that we would need to stay with the same lenders (and just switch products internally) because my husband’s business failed a few years back and he now has a poor credit score (and my income would not be sufficient on its own).

 

We approached each of our lenders and each said that as we were existing customers with a perfect payment history, there was no problem with us switching products ‘in house’. We were able to choose from their full range of products:

 

The Yorkshire allowed us to fix for 5 years. 

The Birmingham and Midshires allowed us to fix for 3 years. 

 

The Cheltenham & Gloucester mortgage was not so easy, however. Lloyds Bank took over Cheltenham and Gloucester (C&G) back in 1995 but continued to maintain the C&G branch network, and sell C&G mortgage products, until around 2009). We, therefore, had to approach Lloyds Bank (to whom we have paid the monthly mortgage payment since 2009) to ask if we could transfer to a fixed rate. They advised us that, they do not let customers who have C&G mortgages change to Lloyds Bank mortgages unless they apply as a brand-new customer. We explained about my husband’s credit history and the adviser explained that this would not fit their lending criteria. 

 

We were unaware of their policy of classing old C&G mortgage holders as different to their own (although I am guessing something was written in small print somewhere when they closed the C&G network in 2009). We feel we did everything we could to ensure that we could afford to maintain our mortgages, recognising that we needed to fix our rates in 2022. Despite never having missed a mortgage payment; the low loan to value on each of the mortgages; and the rental income, at the time of asking, more than covering their rental calculations, we now find ourselves (as is the case for so many other people) really struggling, with monthly interest rises and the rental figure falling well short of the mortgage. 

My question is, do you think there is any point in us raising our case as an appeal/complain with Lloyds Bank?

Thank you very much :-)

ACG

There are specialist bad credit mortgage lenders for BTLs. It would have been worth speaking to a broker back in 2022 really. 

But as far as complaining, I cant see you getting very far. So long as they are not treating you differently to any other C&G mortgage holder, they are not really doing anything wrong. In addition to that, as it is a BTL, you are treated as a business. As a business you do not have the same protections as an individual buying their own home. 

Personally, I do not think your complaint will get very far. You are well within your rights to make a complaint though. 

If things are getting difficult you could sell up. Chances are with 5-6% available on interest rates you will probably get a better return than on the BTL anyway. 

housebuyer143

Sunnyhols said:

My husband and I have three mortgages:

 

A personal mortgage (C&I) with the Yorkshire Building Society, taken out in 2003.

A buy-to-let mortgage (interest only) with Birmingham and Midshires, taken out in 2007.

A buy-to-let mortgage with the Cheltenham & Gloucester, taken out in 2008.

 

All three of which now have a relatively low loan to value.

 

We have always been really careful to keep our personal mortgage on a fixed rate as we knew it could cripple us financially if interest rates increased substantially. 

The buy-to-let properties were taken out on variable rate trackers with the intention of changing them to fixed rate products if rates were to begin to rise in the future. 

 

In February of 2022, the fixed rate product on our personal mortgage came to an end. We decided to take out another fixed rate, and decided that the time was right to change the tracker mortgages to fixed rate products as well. 

 

We knew that we would need to stay with the same lenders (and just switch products internally) because my husband’s business failed a few years back and he now has a poor credit score (and my income would not be sufficient on its own).

 

We approached each of our lenders and each said that as we were existing customers with a perfect payment history, there was no problem with us switching products ‘in house’. We were able to choose from their full range of products:

 

The Yorkshire allowed us to fix for 5 years. 

The Birmingham and Midshires allowed us to fix for 3 years. 

 

The Cheltenham & Gloucester mortgage was not so easy, however. Lloyds Bank took over Cheltenham and Gloucester (C&G) back in 1995 but continued to maintain the C&G branch network, and sell C&G mortgage products, until around 2009). We, therefore, had to approach Lloyds Bank (to whom we have paid the monthly mortgage payment since 2009) to ask if we could transfer to a fixed rate. They advised us that, they do not let customers who have C&G mortgages change to Lloyds Bank mortgages unless they apply as a brand-new customer. We explained about my husband’s credit history and the adviser explained that this would not fit their lending criteria. 

 

We were unaware of their policy of classing old C&G mortgage holders as different to their own (although I am guessing something was written in small print somewhere when they closed the C&G network in 2009). We feel we did everything we could to ensure that we could afford to maintain our mortgages, recognising that we needed to fix our rates in 2022. Despite never having missed a mortgage payment; the low loan to value on each of the mortgages; and the rental income, at the time of asking, more than covering their rental calculations, we now find ourselves (as is the case for so many other people) really struggling, with monthly interest rises and the rental figure falling well short of the mortgage. 

My question is, do you think there is any point in us raising our case as an appeal/complain with Lloyds Bank?

Thank you very much :-)

Lloyds are required to do new checks if taking on a new mortgage and I suppose this is what has happened here as C&G is no longer trading. 

BTL mortgages are not regulated in the same way as residential so you do not have the same complaints procedure. I don't imagine you will have any luck arguing this.

You may need to find a broker and see if you can find another lender who will take it on, however will your rent allow you to take enough borrowing with the higher rates?

JMA74

I used to work for lloyds group and came across this a lot. I was on the Halifax side but they had similar situations with old brands and non transferred mortgage books

Anyway, first step was to submit a case and get the inevitable decline decision.  And then submit an appeal where they can override the decision based on account conduct as long as no further borrowing was being taken 

Not all lenders allowed it, but Halifax and lloyds did so hopefully they still do

If this works then submit a complaint that they didn't do this for you when you first asked as you will now be out of pocket.  The complaint will be about the service received rather than the mortgage itself so it should still come under their complaints procedure