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Hi all

Id be interested on thoughts on this especially from someone with banking/legal experience... @andydclements¬†ūüôā

Ive had a couple of mortgages with Norwich & Peterborough Building Society since 1998. Never missed a payment.

Few years back they got taken over by Yorkshire Bank

When I moved to my current home in 2006 I fixed my rate for 10 years. When that ended in 2016 I fixed again for 10 years until 2026.

Yesterday I had a letter from N&P saying "Your N&P mortgage product will end on May 1st 2021" "As we no longer offer N&P products" "You can remortgage to Yorkshire Bank"

This is the first I've heard that my mortgage will close.

To my mind taking out a mortgage I have a contract which works both ways. If I didn't follow one of their conditions i would be subject to a whole range of fees and charges. So to my mind they seemed to have broken my contract.

Im sure they have legal small print to say they can do what they will but this just doesn't seem fair or right to me.

Obviously I will not be remortgaging with them and already have found a better deal which should save me some money but still seems a bit rich to me.

Just wondering if anyone had thoughts on the matter?

 

buddsy

 

"Belief is the enemy of knowing" - Crrow777

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YBS are not breaking any term of the mortgage. They are simply telling you your fixed rate is ending, and what choices you have.   I don't see why YBS would pay your Santander fees. However, YB

As @Chillidoggy says, first speak with N&P (now YBS), you'll not be the only customer in this situation so they will probably have a fair bit of insight ready, but  go in with an approach of havin

That seems completely wrong.

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It's possible that the buyout / takeover a few years back included a fixed length term for how long they were obliged to honour existing mortgage terms which might have expired now?

Regardless, doesn't seem like the right thing to in my book and like you, I'd vote with my feet and go elsewhere - rates are so low at the moment I'm sure you can save considerable pennies.

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23 minutes ago, Techyd said:

rates are so low at the moment I'm sure you can save considerable pennies.

It could well be they are allowed to discard the fixed term offer contract if in doing so it doesn’t make the borrower worse off.

Only here once

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1 hour ago, Chillidoggy said:

I’d be inclined to speak to N&P first to see what options might be available.

This. I suspect that the normal max fixed rate is 5 years and therefore there will be few people still in a fixed rate. Maintaining a product will be costing them a lot in admin. Bearing in mind that you can almost certainly borrow cheaper now I suspect that they are chancing their arm and hoping that those few customers like you will take advantage of being able to move to a cheaper product and so won't object.

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As @Chillidoggy says, first speak with N&P (now YBS), you'll not be the only customer in this situation so they will probably have a fair bit of insight ready, but  go in with an approach of having questions. Tis isn't financial advice, just some things for you to consider.

The summary, and the first action are pretty much, go and do some preparation, check the paperwork from 2016, check the rates and fees you'd be able to get on a new fixed as compared to the rate you are on today.

 

 

As for ending the term early, clauses normally exist for them being able to terminate early but those are generally in extreme situations and as a result of the action (or inaction) by the borrower. A takeover of the lender would seem unusual if it were to be such a clause. There have been cases in the past where lenders have simply written off some very old low value mortgages ( in essence said to the borrower, don't bother repaying, we'll consider that as full and final payment) because such mortgages were worth less (capital as well as interest) than the cost of updating / replacing computer systems to maintain them. 

Generally speaking a lender cannot unilaterally change the terms of a mortgage, they can do so if the borrow agrees such as re-mortgages. So, as N&P merged with YBS in 2011, it may be that the re-mortgage in 2016 included an option to cease to maintain those N&P-branded products and require you to change terms by giving you notice. I'm not saying they did, just that it may have done because they already had merged by that point.

Are you absolutely sure it was a 10 year fixed that you took out in 2016? It's just that 10 years is the upper end of the spectrum that fixes exist for, and they're not as readily available as say a 2yr or 3yr fixed, so ideally double check your paperwork before calling YBS. To me, it just seems to be at about the time they'd be in touch for a 5yr fixed that is expiring. It's not beyond possibility that a letter has been sent in error and you have 5 years more of that old mortgage to run.

If it was a 10 year fixed and they have found a way to terminate it early unilaterally, then have a look at what interest rate you are/were on and compare to what's out there now. it may be that a new 10yr fixed would be better anyway, so you may find yourself being glad you can re-do the fix, looking at this you may well have been on c3% on a 10yr fixed taken in 2016, but one taken out today may be 0.5% lower . https://www.statista.com/statistics/386301/uk-average-mortgage-interest-rates/

If it was a 10yr fixed and they simply want you to re-mortgage but cannot force you, then they will probably offer (you may need to prompt them) some financial reward for doing so. As yourself, if they effectively gave you a new 10yr fixed with no upfront fees, in return for moving off an half-expired deal would you be happy? Would you want more?

If that letter was an error, and a new deal would be better for you, then YBS may be willing to honor the letter with no early-exit penalty. It may also be that the exact letter you got was meant for customers in other situations and that your letter should simply have told that they no longer offer N&P products so when in 5yrs time it's time for you to re-mortgage it will be YBS product not N&P.

 

 

So, go and double-check the paperwork, check the current deals out there and how they compare, get in your mind (or do a little table on paper) of what each possibility would mean to you), then (if it was a 10 yr fixed in 2016) go and ask YBS why they believe they can change the mortgage.

 

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Thanks for the comments chaps. Great info @andydclements¬†I knew you would have some insight.¬†ūüôā

I will go back and check my paperwork. 

 

buddsy 

 

"Belief is the enemy of knowing" - Crrow777

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19 minutes ago, 910Esprit said:

Coud be that an IT platform/software upgrade has forced their hand.  Its in nobody's interest to piss off loyal customers

YBS (which it seems to be rather than Yorkshire Bank - per the OP) have their own way of doing things. Our mortgage is with them and I do like them, I've found them very honourable/old fashioned, but they have their own way of doing everything and that is the way they will do it and they don't get that there may be another way. It's a bit like dealing with Grace Brothers...

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YBS (Yorkshire Building Society) was who I had my mortgage with until I paid it off. In 19 years of dealing with them I never had a single issue, a single concern, or a single cause for complaint. They were brilliant. Cannot recommend them highly enough.

I suspect that what is happening here is that your current mortgage, an N&P 10 year fixed product, is coming to then of it's term and you are being informed that you need to change to a new product (which cannot be an N&P one) or revert to the YBS standard mortgage term product. This is what usually happens at the end of every "fixed term mortgage" and obviously people usually switch (with a fee) to another fixed term product from the same lender - not possible here as N&P products are no more. I would expect YBS would offer to switch you to one of their fixed term products.

However, I very much doubt they have anything in their contract that would allow them to "break" a "fixed term contract" - otherwise, it is not a "fixed term contract".  As others have said, a phone call may well clear this up easily. Wish you luck.

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Incidentally, may be some use to the OP,  but the original reason I went with YBS is that their offset mortgages work really well.

You can actually offset up to 100% of the mortgage, so if you cold pay it off, but it is still in a deal then you can actually offset it until the deal ends and avoid exit charges. Might be worth looking at before you go off elsewhere.

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  • 2 weeks later...

Hi 

An update - I looked into this and yes when I updated my deal in 2016 the best I could fix was 5 years so as this fixed rate is due to end on 1st May thats when they are saying I have to move my mortgage by.

Ive been looking around at a fixed 5 year deal. I have an account with Santander and they seem to be one of the best in terms of price.

There are fees however. Looking at circa £1250 

So can I ask N&P to pay my fees? As I have a contract with N&P I feel I am with in my rights to negotiate terms to accept their breaking of our contract. Am I right?

 

buddsy

 

"Belief is the enemy of knowing" - Crrow777

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@Buddsy

 I think you need to carefully re-read the letter. I suspect they (YBS) are saying you have to move if you wish to take out a new rate, you'd not be forced to move lender if you were to move to their  (N&P) Standard Variable Rate (SVR). I'm not saying that moving to SVR is nor isn't the right thing but I'd guess it's likely to be a lot higher cost than any new deal even with fees.

If the above is the case, then you'd not really be able to claim fees from YBS. To put it simply, it's your decision to take a new deal (irrespective of whether it's YBS, Santander or any other lender), so you pay the fees just as you would anyway when doing a remortgage for a new rate, YBS/ N&P would happily let you sit on the N&P SVR so they are not breaching the contract, they are being up front in telling you that they'll not be offering any customers a new N&P deal.

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Go and see a good mortgage broker who will know all the market rates available with or without fees and a good one won't charge you.

hindsight: the science that is never wrong

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16 hours ago, andydclements said:

I think you need to carefully re-read the letter. I suspect they (YBS) are saying you have to move if you wish to take out a new rate,

Here is their offer. Im thinking about submitting a conditional offer of acceptance setting out a cash lump some I would accept to allow them to break our contract.

IMG_20210216_0001.jpg

 

buddsy

 

"Belief is the enemy of knowing" - Crrow777

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Ive just spoken to N&P and they say this letter just applies to my fixed period coming to an end.

Doesnt read like that to me but I guess thats why Im just an engineer.

 

buddsy

 

"Belief is the enemy of knowing" - Crrow777

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18 hours ago, Buddsy said:

Hi 

An update - I looked into this and yes when I updated my deal in 2016 the best I could fix was 5 years so as this fixed rate is due to end on 1st May thats when they are saying I have to move my mortgage by.

Ive been looking around at a fixed 5 year deal. I have an account with Santander and they seem to be one of the best in terms of price.

There are fees however. Looking at circa £1250 

So can I ask N&P to pay my fees? As I have a contract with N&P I feel I am with in my rights to negotiate terms to accept their breaking of our contract. Am I right?

 

buddsy

YBS are not breaking any term of the mortgage. They are simply telling you your fixed rate is ending, and what choices you have.
 

I don't see why YBS would pay your Santander fees. However, YBS may be able to waive their own fees if you want to go with one of their products. As others have said, you are free to shop around for the best deal now. 

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@SFO @Buddsy - their letter clearly states that if you move to a YBS standard mortgage they will pay your fees and any redemption penalties that may be due. Seems fair to me.

Of course, you'll pay it back to them in what will likely be a higher interest rate than a fixed one. And, if you pay fees and go for one of those fixed ones then you'll save the fees, and likely more, in the reduced interest charges.

Either way, your choice but they get their fees, one way or the other, lol!

Alcohol. Sex. Tobacco. Drugs. Chocolate.  Meh! NOTHING in this world is as addictive as an Evora +0. It's not for babies!    

The first guy to ride a bull for fun, was a true hero. The second man to follow him was truly nuts!   

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