Building Society prematurely ending mortgage

Cumbrianchap

dunstonh said:

Can an existing mortgage (in place since 2016) be taken away like this?

Technically, it's not being taken away.  The ability to offset is being removed but the mortgage and the mortgage terms remain the same.

We think they are trying to scare us into revising our mortgage to suit their management plan. There is no "as part of our ability under condition ... of our mortgage agreement with you", etc suggesting their entitlement to do this.

Offset mortgages are expensive to operate and have become less popular as more and more people went fixed rate rather than use offset.   There comes a point where a product is no longer viable to offer.

They have to meet the credit terms agreed but the offset is bolt on functionality and doesn't have the same requirement to be continuously offered.

But it is being taken away. We have the option to switch to another product, but it will be a new (replacement) mortgage.

The contract runs to 2031. The offset isn't a bolt-on. It's an integral part of the agreement with a requirement to have an offset savings account as part of the conditions of the mortgage. Other lenders still offer this sort of product. I don't qualify due to my age.

I understand your perspective is but don't agree with your conclusion.

Cumbrianchap

HobgoblinBT said:

The lender can change their terms of the loan if your agreement allows them to do so.  

There is nothing in their T&C's that state they can vary or curtail the mortgage unless we default or fail to comply with the requirements of the mortgage. We have done neither.

WD40AGAIN

Hi all, I am new to this forum but read it often.  

The withdrawal of the offset mortgage by the CBS affects us too.  I am just over 70 and come up against the same hurdles of finding a new provider of a similar product, with the only barrier being age!  We have the income to support a mortgage and could pay off the mortgage with the savings in the offset account, however, as has been said before, the flexibility of the offset is unbeatable especially if you have a significant amount to offset the mortgage. The offset mortgage has helped us build a business that we would not have been able to so easily with any other mortgage on our home 🙂.  Having a mortgage on on your home can also facilitate some IHT planning flexibility if you have assets over the threshold 🤔.

I understand that if the customer has an offset savings account which is a significant proportion of the mortgage, then the BS are likely to be losing money operating these accounts and that is not a good business model.  The CBS are, or seem to be, an old fashion type of bank which we found very appealing and given that, I can foresee that they will have a high proportion of maybe older mortgage customers on Offset products, who also have large offset savings.  We have had a very good and relationship with CBS and always able to easily speak to someone in person when we need to, which is becoming more unusual these days! 

In support of CBS, they are offering some compensation and a further reasonable sum towards the cost of moving away, which I find reassuringly caring.  They will offer alternative types of mortgages to those affected but they will not be comparable.  We are looking to try and find an alternative to maintain that flexibility but I think it will be an uphill task!

  

silvercar

WD40AGAIN said:

Hi all, I am new to this forum but read it often.  

The withdrawal of the offset mortgage by the CBS affects us too.  I am just over 70 and come up against the same hurdles of finding a new provider of a similar product, with the only barrier being age!  We have the income to support a mortgage and could pay off the mortgage with the savings in the offset account, however, as has been said before, the flexibility of the offset is unbeatable especially if you have a significant amount to offset the mortgage. The offset mortgage has helped us build a business that we would not have been able to so easily with any other mortgage on our home 🙂.  Having a mortgage on on your home can also facilitate some IHT planning flexibility if you have assets over the threshold 🤔.

I understand that if the customer has an offset savings account which is a significant proportion of the mortgage, then the BS are likely to be losing money operating these accounts and that is not a good business model.  The CBS are, or seem to be, an old fashion type of bank which we found very appealing and given that, I can foresee that they will have a high proportion of maybe older mortgage customers on Offset products, who also have large offset savings.  We have had a very good and relationship with CBS and always able to easily speak to someone in person when we need to, which is becoming more unusual these days! 

In support of CBS, they are offering some compensation and a further reasonable sum towards the cost of moving away, which I find reassuringly caring.  They will offer alternative types of mortgages to those affected but they will not be comparable.  We are looking to try and find an alternative to maintain that flexibility but I think it will be an uphill task!

  

Welcome to the forum!

To be clear it is Cumberland BS that appears to be withdrawing their offset, Coventry BS still offer them, it may be worth looking there, particularly if you have a low Loan to value.