Quick question - reduced interest through mortgage charter product swap

whitling2k

Hi all,  just a quick call for people's experiences in using the mortgage charter to lower your interest rates in the time between early renewal with the same lender, and the new fixed rate starting.

I am calling them tomorrow for clarification.

Three weeks before my new 5.55 rate was to begin, my lender (Accord) dropped their rates by 0.2% for my product (5yr fix, £995 up-front (&paid) product fee).  So I immediately completed their online form and my documentation to sign arrived yesterday.  2.5 weeks before my rate fixes.  So there is a little urgency.  

The paperwork I have been asked to sign is a little unclear, in that it indirectly implies I will need to pay  £995 by adding it to my mortgage.  Even though I have already paid the £995.

The charter letter, upon review, does say the transfer is free, but all product fees and early repayment charges will apply; as opposed to still apply.

My question is this:  should I need to pay two lots of up-front product fees to switch to the same product, but with a 0.2% lower interest rate under the Mortgage Charter?

ACG

I dont think this is anything to do with the mortgage charter. The mortgage charter as far as I am aware just says you can ask for a lower rate - no guarantees they will offer it and very unlikely. 

What you are doing is a Product transfer, but then rates have dropped since you did the original transfer - we are doing a few of these at the moment. 

The 995 is usually added to the product it is rare people pay it upfront. But you in this case the fee is applicabale to the product, so the fee you have paid is for the old product. Does it say on your paperwork that that fee is refundable until completion or non refundable? If non refundable then I think it would be a new fee - although they might take the common sense approach that they should be refunding or transferring the old fee over. If you had added the fee to the mortgage it would not have been paid, so you are being treated worse because you paid it upfront in essence. I am not sure how that passes TCF/Consumer duty. 

whitling2k

Thanks for your response.  

Interesting, I did this following the process outlined in their mortgage charter letter, offering a 'free' switch to a like-for-like product if a like-for-like product albeit with a lower rate comes out between my early renewal and .  It was very ambiguous.  I think I need to speak to them. 

The forms that have arrived certainly look like the product transfer process rather than a mortgage charter switch.

Thanks again

ACG

The mortgage charter is still new and how every lender implements it will differ. 
It could be that they have incorporated this into the mortgage charter process or not or someone somewhere has got confused. 

But pre-mortgage charter this would have still been possible (one of the reasons why this mortgage charter was just the government trying to get some kudos from the general public, most of the charter was already in place before ti was ever announced). 

I think as you say, you need to speak to them. But maybe dont necessarily mention the charter at the outset. Just explain you have done a PT, rates have come down and you now want one of the new lower rates and the fee you previously paid either transferring over or refunding so you can pay it on the new product. 

Accord are pretty decent - I used to really dislike them and kicked them off our panel, but they have turned it around and are generally quite easy to work with now. 

MWT

whitling2k said:

Interesting, I did this following the process outlined in their mortgage charter letter, offering a 'free' switch to a like-for-like product if a like-for-like product albeit with a lower rate comes out between my early renewal and .  It was very ambiguous.  I think I need to speak to them. 

When you talk to them, reference this example from their website:

whitling2k

Part of me wonders if it's jus the way they have slotted the new process into their existing ways of working 🤞

MWT

whitling2k said:

Part of me wonders if it's jus the way they have slotted the new process into their existing ways of working 🤞

Most likely, there hasn't been time to do much more than that...

whitling2k

Apparently it's a 'standard letter' and there is no cost to transfer to a like-for-like product with a lower interest rate in the days between accepting a new fix and the fixed rate actually starting (minus two weeks).

I wonder how many people have phoned them with the same query?

ACG

Its probably quite a bit over the last couple of months. 
I suspect you may have used the wrong terminology (not your fault) with the advisor and they have not thought about it which has caused the confusion. 

Looks like all will be ok though.