I have a fixed rate buy-to-let mortgage contract with The Mortgage Works. The mortgage was to buy my daughter and her family a place to live in, and they pay us rent. My wife and I were paying £500 a month towards this mortgage but the firm wrote to us in January saying it is now going up to £942.
A second letter came just days later correcting this and saying it was now going up to £1,069.
As we are on a two-year fix, I can’t see how this is allowed to happen. Surely this is a mistake. Can you help us sort it out please? M.W., via email
Grace says: How peculiar. You had taken out a fixed-rate mortgage, which mean the payments should have stayed the same for two years.
So you were understandably puzzled when you received the first letter from The Mortgage Works, a sub-division of Nationwide, announcing the amount you paid was to nearly double.
It wrote: “From time to time it’s necessary for us to review the interest rates we charge our variable rate customers – for example, if the Bank of England base rate changes. And after a recent review, the interest rate on your variable account(s) will be changing on 01 February 2023.”
However, you are not on a variable rate. You and your wife are on a fixed deal, interest-only deal, paying a rate of 1.99 until the end of this year.
Confused, you rang the company and after a long wait was told by a customer service staff member that it was a “general letter” and you could ignore it.
You had a feeling this wasn’t correct so you wrote to The Mortgage Works – after not being able to find an email address – and asked for clarification. You sent this letter by recorded delivery.
You didn’t hear back, then received another letter in February after the base rate went up again, now saying your payments would increase from March to £1,069.
And then, on 24 February, £942 was taken from your account by The Mortgage Works.
You tried to contact the firm again but found it difficult to get straight answers from the person on the phone. They repeated that was a “general letter” – however, now you had been charged you knew this wasn’t the case.
You wrote another letter of complaint, again sent by recorded delivery, on 1 March, asking why your previous complaint had been ignored and why you had been charged more money. In the letter, you also re-iterated the amount of stress this had brought on to you.
However, you still didn’t receive a reply. At this point, you got in touch with me to clarify what on earth was going on.
I contacted Nationwide, which owns the Mortgage Works, and asked for an explanation.
I was told that due to human error, your mortgage was wrongly changed to a tracker deal, one that goes up and down in line with the Bank of England’s base rate.
The error was solely on your account.
A Nationwide spokesperson said: “We are in the process of correcting the account and arranging a refund for the additional payment that was taken.
“We have offered a £200 compensation for the stress and inconvenience caused, which has been accepted.”
I am glad you have been recompensed but you say this has been a very anxiety inducing experience – and at the end of the year, no doubt will put into question whether you want to stay with the Mortgage Works.