Can I borrow my own money?

[Thomk]

Or more acurately, can I borrow back mortgage overpayments?

My mortgage included a borrow back facility and it was one of its main attractions. I overpaid by about £20K and now want to borrow it back. The bank tells me that I can but have to pay a large borrow back fee which they inroduced only 4 months ago without telling me or any of their customers (before then it was free).

"You can't do that.......can you?"
"Yes this is one of the things we are allowed to do"

Are they?

 

[biggs682]

we are planning on doing same with Nationwide and they never mentioned a borrow back fee , who yours with Thomk

 

[Thomk]

Market Harborough

 

[gavintc]

You have to ask yourself, 'whose money is it?' You are borrowing money, the situation has worsened in recent years, it is not unremarkable that lender will place greater restrictions on the supply of its money.

 

[Thomk]

Yes I understand that. However, banks are being put under more and more pressure, quite rightly in my opinion, to be honest and transparent to their customers are they not?

 

[gavintc]

Accepting the need for openness, I suggest this falls a poor second to the need to provide a return on investment for shareholders.

 

[Flying Dodo]

Check carefully the wording of the original mortgage offer letter and also the Key Feature notes for the mortgage quote, to see exactly what they say about the option to access funds. If they don't make any mention that there might be a fee, then you may have grounds for making a complaint.

 

[Thomk]

It makes no mention of a fee. It says I may borrow back overpayments and to contact the bank for full details.

 

[Thomk]

Accepting the need for openness, I suggest this falls a poor second to the need to provide a return on investment for shareholders.

I should think that they could manage to do both.

 

[oldfatfool]

It makes no mention of a fee. It says to contact the bank for full details.

And you did, and they have provided you with details. Now if you had taken out an offset mortgage instead.......

 

[Thomk]

And you did, and they have provided you with details. Now if you had taken out an offset mortgage instead.......

Which is fine if we are all happy to concede that when a lender says this they mean "this benefit means nothing because we can do what we want or ignore it completely".

But, we want honesty and transparency don't we?

 

[oldfatfool]

Which is fine if we are all happy to concede that when a lender says this they mean "this benefit means nothing because we can do what we want or ignore it completely".

But, we want honesty and transparency don't we?

I am guessing that if you pay their fee then you will automatically be entitled to borrow back the overpayment, they will argue this is a benefit because with any other mortgage you would have to first have to pay for a valuation and have a minimum figure you would have to borrow, on top of normal arrangement fees, it may also be the case that your borrow back will be at the same rate as your current mortgage whilst a new borrowing could be at a disadvantageous rate. They would also argue that you didn't pay any penalties for your original over payment.

Don't get me wrong, I think it is one massive con, you would think they would be happy to reinstate your original borrowing so they can earn interest off it, but whilstever they think they can screw a few extra quid they will.

 

[swee'pea99]

I'd suggest you nip along to your local citizens asdvice bureau with all relevant bits of paper/leaflets/brochures you can lay your hands on. They're very good at this sort of thing and should be able to tell you very quickly where you stand.

 

[Thomk]

I am guessing that if you pay their fee then you will automatically be entitled to borrow back the overpayment, they will argue this is a benefit because with any other mortgage you would have to first have to pay for a valuation and have a minimum figure you would have to borrow, on top of normal arrangement fees, it may also be the case that your borrow back will be at the same rate as your current mortgage whilst a new borrowing could be at a disadvantageous rate. They would also argue that you didn't pay any penalties for your original over payment.

Don't get me wrong, I think it is one massive con, you would think they would be happy to reinstate your original borrowing so they can earn interest off it, but whilstever they think they can screw a few extra quid they will.

I think this is all mostly true. The 2 things that irritate me most about this though are 1) I paid slightly more for this mortgage so that I could have this benefit and 2) I overpaid more than I would have if I had known about this new fee.

 

[Thomk]

I'd suggest you nip along to your local citizens asdvice bureau with all relevant bits of paper/leaflets/brochures you can lay your hands on. They're very good at this sort of thing and should be able to tell you very quickly where you stand.

Good advise.