mortgage query

waitingforBB

All,
i took out a 2 year fixed rate mortgage with a provider late 2007. Subsequently, after about 16 months or so, like many others i saw that the variable rate was lower then the fixed rate I was tied into and hence asked the provider if it was possible to move to the variable rate.

Some friends were in a similar position and on enquiry of switching to variable were presented with demands for significant 'redemption fees' to move to variable.

However, when i rang the provider, there was no request for same redenption and I was just requested to send in written request for change to variable. I got confirmation for same within days.

Now I undersand why there was such expedience with my request...

I have since discovered that in my original mortgage agreement that the contract stated that once exiting the fixed rate, then my mortgage would enter into a tracker of 1% of ECB.

My bad on not being aware of this when requesting the change.
Question is, was there an onus on the mortgage provider to advise me of same when I was enquiring about switching to variable?

Same provider has since upped the variable to 4.65 so Im way out of pocket.
Do I have any comeback?

Thanks

dotsman

waitingforBB wrote: »

Question is, was there an onus on the mortgage provider to advise me of same when I was enquiring about switching to variable?

Debatable.

If it was to happen today, then yes there would be. The regulator recently stepped in on this and instructed banks that they are to specifically outline any negative aspects to a customer if they are switching rates (predominantly, if they are switching off a tracker).

However, that's only recent. Prior to then, a bank should have advised the customer (ie, acting in the best interests of the customer), but it's a gray area to say if the were legally obliged to.

waitingforBB wrote: »

Do I have any comeback?

Given the recent statements by the regulator, you can try talking to your bank. But ultimately (especially given the time since this happened), it's unlikely they will budge.

In the end, not just in banking, but in all commercial dealings, the ultimate onus is on the customer. The bank, in this case, did not try to dupe you or mislead you. It would have been very clear in the mortgage documentation, which you had a solicitor explain to you, and which you signed, what rate you were on. Unfortunately for you, this has proven to be a costly mistake.

Again, try talking to your bank, and the best of luck with it, but I wouldn't hold my breath -sorry!

chris85

I agree with dotsman here. You instructed your bank to put you on a variable rate and they acted on your instruction. They didnt try to get you off it, you actively sought this change yourself.

Also the regulator only came out this Summer against the banks getting people off trackers so this happened well before that if the bank would have any case to answer but it doesnt appear they do.

I would talk to your bank nicely and tell them you werent made aware you be taken over your tracker. Gently put pressure on them to get you on back onto your tracker. If not happy do put in a complaint and go to the financial services ombudsman if not happy with the response. No harm really considering the money you could save. I would certainly not give up on it at moment. Worth a punt as they say, you have nothing to lose and a good bit to gain.

Dont go in all guns blazing as they havent really done anything wrong and pays to be nice as the staff may be more helpful with you. They also understand the regulations they are being straggled with at the moment and may sort you out.