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  • FIRST POST
    • benloose
    • By benloose 14th Jun 19, 6:19 PM
    • 2Posts
    • 1Thanks
    benloose
    Fixed rate changed before completion
    • #1
    • 14th Jun 19, 6:19 PM
    Fixed rate changed before completion 14th Jun 19 at 6:19 PM
    Hi

    I have just completed on a 10 year fixed rate remortgage with First Direct - great rate of 2.44%, however, just before completion I noticed that the same fixed rate had been reduced to 2.39%.
    First Direct did't notify me, and I am now on the 2.44% rate.
    It looks like the rate was reduced just after I applied and reserved my rate, months before I completed.
    This was a fee free deal, so I did not pay a product fee.
    My question is whether FD should have told me that the product I had reserved had been reduced before I completed? I know I should have noticed and raised it with them before completion, but I didn't. I also feel that they should have told me that they had reduced the rate, and at least given me the opportunity to re-apply.
    The lower rate would reduce y repayments by about £30 per month, so £3600 over the period of the fixed rate - not an insignificant amount.

    Has anyone else had a similar experience and how was it resolved?
Page 1
    • Kentish Dave
    • By Kentish Dave 14th Jun 19, 7:14 PM
    • 806 Posts
    • 1,496 Thanks
    Kentish Dave
    • #2
    • 14th Jun 19, 7:14 PM
    • #2
    • 14th Jun 19, 7:14 PM
    No, they should not have told you. If you order a new sofa before the sale do you expect to get the sale price? If you book a holiday before a price reduction do you expect to get the predicted price?

    If the rate had gone up would you have expected your price to rise?

    If not why the asymmetry?
    • LRmortgage
    • By LRmortgage 14th Jun 19, 7:17 PM
    • 332 Posts
    • 156 Thanks
    LRmortgage
    • #3
    • 14th Jun 19, 7:17 PM
    • #3
    • 14th Jun 19, 7:17 PM
    You’re effectively buying a product. They can offer new products at anytime to new customers, it doesn’t mean they should notify you of this.

    If you check carefully, it will probably have a different product code.

    You got what you applied for.
    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.
    • Thrugelmir
    • By Thrugelmir 14th Jun 19, 10:00 PM
    • 65,042 Posts
    • 57,324 Thanks
    Thrugelmir
    • #4
    • 14th Jun 19, 10:00 PM
    • #4
    • 14th Jun 19, 10:00 PM
    My question is whether FD should have told me that the product I had reserved had been reduced before I completed?
    Originally posted by benloose
    Not the same product. Your product was withdrawn and another offered in it's place.
    ďIf the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.Ē
    ― Niall Ferguson
    • FIRSTTIMER
    • By FIRSTTIMER 15th Jun 19, 7:43 AM
    • 612 Posts
    • 110 Thanks
    FIRSTTIMER
    • #5
    • 15th Jun 19, 7:43 AM
    • #5
    • 15th Jun 19, 7:43 AM
    Class example of going through life expecting everything
    • csgohan4
    • By csgohan4 15th Jun 19, 9:17 AM
    • 6,512 Posts
    • 4,405 Thanks
    csgohan4
    • #6
    • 15th Jun 19, 9:17 AM
    • #6
    • 15th Jun 19, 9:17 AM
    You could have re applied and risk not completing and losing your deposit, is that worth the risk?

    If you bought something and keep on checking the prices, do you expect a refund of the difference?
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • JMA74
    • By JMA74 15th Jun 19, 11:30 AM
    • 720 Posts
    • 523 Thanks
    JMA74
    • #7
    • 15th Jun 19, 11:30 AM
    • #7
    • 15th Jun 19, 11:30 AM
    Some lenders allow you to change the product midway through the process without re-underwriting the case. Some charge for the privilege to avoid people messing them around changing all the time

    I assume you were on top of it to see if they allowed it and you asked for it when you saw the lower rate?
    Is your complaint that they didnt act on your request or that they did something without your approval?

    I can only imagine the consequences if banks are allowed to amend financial contracts without the client being involved.
    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.
    • benloose
    • By benloose 16th Jun 19, 7:48 AM
    • 2 Posts
    • 1 Thanks
    benloose
    • #8
    • 16th Jun 19, 7:48 AM
    • #8
    • 16th Jun 19, 7:48 AM
    Thanks - gosh you are a passive aggressive lot.

    For the record, I am not stupid, I don't expect anything for free, and I am an intelligent professional. I don't appreciate the assumptions that you make.

    I understand that I signed up for a deal and I am happy with it - my question was, whether they should have told me that effectively what they had offered me had become cheaper before I completed the deal. In a landscape where financial institutions are expected to treat customers fairly, I think that they could have at least informed me, and let me make a decision.

    Anyhow - thanks for your pearls of wisdom.
    • csgohan4
    • By csgohan4 16th Jun 19, 8:06 AM
    • 6,512 Posts
    • 4,405 Thanks
    csgohan4
    • #9
    • 16th Jun 19, 8:06 AM
    • #9
    • 16th Jun 19, 8:06 AM
    I wonder if brokers on here will let your clients know of cheaper deals.


    but OP if you were close to exchange, your vendor wouldn't be impressed to know you were applying for a new mortgage for the sake of £30 a month.


    You applied alone, therefore the research you did is your own and responsibility is your own, the bank are not obligated to let you know new deals. It's not like a newsletter sign up with your local online retailer.
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • getmore4less
    • By getmore4less 16th Jun 19, 8:40 AM
    • 37,477 Posts
    • 23,141 Thanks
    getmore4less
    The lower rate would reduce y repayments by about £30 per month, so £3600 over the period of the fixed rate - not an insignificant amount.
    That would be a very big mortgage to get a £30pp difference on payment with a 0.05% difference in rate

    Have you just done the interest only mortgage(£720k) x difference(0.0005) in rate to get £30?

    if the mortgage is smaller than that then the difference will be less.

    if you have repayment the the difference will be less

    depending on term the real difference will be
    amount..rate.....20y.....30y.....40y
    £720k 2.44% £3,794 £2,823 £2,351
    £720k 2.39% £3,777 £2,804 £2.331
    difference.........£17 ....£19 .....£20

    A £1.1m mortgage gets closer at 40 years £30
    £1m 2.44% £3,591
    £1m 2.39% £3,561


    it might be you do have a very big mortgage perhaps you could clarify?

    edit: to add
    The other easy mistake is your mortgage is actually around £72k and you just got the decimal point in the wrong place.

    The other thing is that the difference in payment is the wrong way to work out the difference in cost of the 2 rates over 10 years.
    Last edited by getmore4less; 16-06-2019 at 8:51 AM.
    • Kentish Dave
    • By Kentish Dave 16th Jun 19, 9:09 AM
    • 806 Posts
    • 1,496 Thanks
    Kentish Dave
    Thanks - gosh you are a passive aggressive lot.

    For the record, I am not stupid, I don't expect anything for free, and I am an intelligent professional. I don't appreciate the assumptions that you make.
    Originally posted by benloose
    Nothing aggressive about a plain response to a stupid question, and I donít care what you appreciate or donít.

    Why would you think you should be told if a cheaper product comes along? If you cared why donít you take responsibility and keep an eye out yourself? Itís part of being an adult. Well, it used to be, that seems to be out of fashion now in these entitled times.
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