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RBS / NatWest product switchers be warned!

Hi everyone, I’ve found this site so useful over the years so wanted to feedback a current experience of mine. 

I recently entered the 6 month period towards the end of my fixed rate mortgage with RBS. I’m a Premier banking and business customer, so expected that maybe the bank would show a loyal customer (how wrong I was) how to deliver great service by at least offering the same rate on a product switch that they offer new customers. It appears the current 5 year fix 75% LTV for new customers is 3.99% on their green mortgage A & B Energy efficient homes (we are A) with a £995 fee. However, to my disappointment logging into the bank on the first day I was eligible the rate being offered is 4.39%. A total of approx £3,400 more in interest over the 5 years. 

Now I know, technically they are not breaking any rules here, (neither did The PM taking gifts, but it doesn’t make it right), it’s just another example of how the banks want us to be loyal to them, but they show no loyalty in return and I feel they are trying to take advantage of me a loyal customer. My issue is, with 2 subparts to my mortgage and the 2nd part with 3 years to run on its fix, I’m stuck between a rock and a hard place without paying a 4% early redemption charge on part 2. After speaking to a broker today, they confirmed that RBS only do product switches in house so I can’t do a switch with broker to a better rate either.

In the long run, if their policy doesn’t change, I intend to move all my banking from RBS as my protest, but in the meantime, does anyone have any suggestions?
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Comments

  • Hoenir
    Hoenir Posts: 4,503 Forumite
    1,000 Posts First Anniversary Name Dropper
    Your protest will be meaningless. People switch lenders all the time. NatWest won't be bothered either. 
  • Maybe you’re right, but isn’t the whole point of protesting and expressing dissatisfaction about something the only way things ever change? It’s not really about people switching lenders, it’s about current customers being offered a worse deal, than new customers. This was abolished in the insurance market, why? Because people protested and many people then worked hard behind the since, including Martin Lewis to get it changed. I know from his recent podcast about mortgages that this was mentioned, so I just wanted to offer some support from an unhappy customer and felt this would be a good place to start. 
  • born_again
    born_again Posts: 16,924 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    edited 3 October at 10:58AM
    You are confusing 2 separate & different products.

    A rate/product switch which is a internal only offer with no proof of financials required & a remortgage which is open to both current internal & external customers but requires a financial assessment to be approved. 

    Life in the slow lane
  • ACG
    ACG Posts: 24,030 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    I love your whole post about loyalty. 

    Because they wont offer you a new deal at the same rate as a new customer you would be off if there was no ERCs on the other part of your mortgage. 

    That is not loyalty. 

    Loyalty is sticking with them through thick and thin and them doing the same with you. 
    No big business is loyal. Those days are gone. But just to add some context, banks are regulated, regulation is going against you here. If the bank does something for you, they have to offer it to everyone. 

    A few years ago, our fees were based on the level of adverse people have (as we do mostly adverse mortgages), if someone had a large mortgage I would reduce their fee as the commission was more and it felt unnecessary to charge the same. Because of the FCAs consumer duty rules I now cant do that. Their take on the matter was that it would mean some customers are worse off. My take was that some customers were better off and benefit from the lower fee... I can no longer do that and so now nobody benefits.


    I am a Mortgage Adviser
    You 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.
  • I suppose thats a great way to justify it if you’re the bank. However, hasn’t your current lender already done your financials when you first took out the mortgage? Has your current history etc.. therefore you’re a known risk rather than a new customer who is a higher risk? 

    You’ve only got to look at this website to see that Barclays, HSBC, Nationwide and Virgin Money all offer product switches at a better rate than remortgages to new customers, so your argument really doesn’t stack up as all lenders would charge more based on your perspective. 
  • ACG said:
    I love your whole post about loyalty. 

    Because they wont offer you a new deal at the same rate as a new customer you would be off if there was no ERCs on the other part of your mortgage. 

    That is not loyalty. 

    Loyalty is sticking with them through thick and thin and them doing the same with you. 
    No big business is loyal. Those days are gone. But just to add some context, banks are regulated, regulation is going against you here. If the bank does something for you, they have to offer it to everyone. 

    A few years ago, our fees were based on the level of adverse people have (as we do mostly adverse mortgages), if someone had a large mortgage I would reduce their fee as the commission was more and it felt unnecessary to charge the same. Because of the FCAs consumer duty rules I now cant do that. Their take on the matter was that it would mean some customers are worse off. My take was that some customers were better off and benefit from the lower fee... I can no longer do that and so now nobody benefits.


    I’m confused, are you saying that regulation prevents the bank from treating existing customers the same and new ones? That’s nonsense. Otherwise the other main stream lenders I highlighted above would not be offering BETTER rates to existing customers. I agree regulation means you need to treat the same “product” customers equally. The main point of my original post was to make people aware that a product switch, with RBS / NatWest is going to cost you more than a new customer is offered for the same LTV and fix period which I think is wrong. 


  • ACG
    ACG Posts: 24,030 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    I’m confused, are you saying that regulation prevents the bank from treating existing customers the same and new ones? That’s nonsense. Otherwise the other main stream lenders I highlighted above would not be offering BETTER rates to existing customers. I agree regulation means you need to treat the same “product” customers equally. The main point of my original post was to make people aware that a product switch, with RBS / NatWest is going to cost you more than a new customer is offered for the same LTV and fix period which I think is wrong. 


    No. Im saying if they off you an existing customer a better deal than every other existing customer that would be deemed unfair. So they would have to offer it to all existing customers at the same LTV banding as you. 
    I am a Mortgage Adviser
    You 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.
  • That’s been my whole point all along!! That’s what they should be offering! Not just to me! 
  • MWT
    MWT Posts: 9,494 Forumite
    1,000 Posts Fourth Anniversary Name Dropper
    That’s been my whole point all along!! That’s what they should be offering! Not just to me! 
    I suspect that ACG was reacting to this bit in your first post...
    I’m a Premier banking and business customer, so expected that maybe the bank would show a loyal customer (how wrong I was) how to deliver great service by at least offering the same rate on a product switch that they offer new customers.
    It wouldn't matter how many different accounts you have with them or how many products you have from them, they can only treat you just like every other existing customer and cannot take into consideration the level and duration of your other business with them, so your 'loyalty' in that regard is irrelevant.

    I suppose thats a great way to justify it if you’re the bank. However, hasn’t your current lender already done your financials when you first took out the mortgage? Has your current history etc.. therefore you’re a known risk rather than a new customer who is a higher risk?
    They had your details when you first took the mortgage, which could have been years ago, so they are taking a risk in assuming that nothing has changed, but ultimately even that is just a commercial decision, and they have clearly decided that they want to attract new business with better rates and have less need to worry about existing customers.


  • Hoenir
    Hoenir Posts: 4,503 Forumite
    1,000 Posts First Anniversary Name Dropper
    That’s been my whole point all along!! That’s what they should be offering! Not just to me! 
    That then takes the conversation into a whole new dimension of how lenders build risk adjusted mortgage books. That individual mortgage products only have limited tranches of funds available. Once all the funds are applied for and offered, the product is withdrawn. Lenders likewise sometimes to wish advance less, sometimes more. Many factors are involved at the macro level. HSBC advances somewhere around £15 billion a year of new funding.  Far more complex than it appears at street level. 
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