First Active moving the goalposts on CAM - not fair?

Yip, I think thats a comprensive list of the options. There was an article in the Times or the Indo recently, some arty type guy again giving out about First Active.

The one thing that irks me a bit is how its been said a few times by FA that the standard repayment option was confusing for potential customers so thats why it was dropped. Apart from being condescending to the public, if that was the only problem couldnt they simply not issue any more new ones - are they afraid to publicly admit their IT systems cant cope - or might someone in the know come out and rubbish that line.

In fairness I think they've probably covered themselves with the Financial Regulator - I threw this in at my meeting, were they worried about the Financial Regulator, and the guy said they thought they were ok, they had their homework done/checked it out.

I presume any poor sod who sent their FA approval form straight back wont be denied this new deal.
 
Hi,
Got the same offer from FA. It did'nt mention the the 1K limit for the solicitor but did mention a fixed rate of 3.75% for 1 year.
Even allowing for DIRT, the Money Market Deposit Account (MMDA) of ECB plus 2.25% looks good.
Would it be a good idea to go for the interest only option? Instead of paying the principle back to the bank every month you could stick it into the MMDA? Does anyone think that the options offered by FA are not fair?
Any advice welcomed.

Thanks
A
 
Sorry for being a dimbo here but could someone explain in about this
I ahven't received any letter
I have a CAM
We have a large sum on deposit , and pay our mortgage every month at a variable rate
which has gone up a bit over the last few months ( of course)
Is there another option we could look at
You all seem to know the ins & outs of all this
and i'm not even sure what i'm missing out on
CAn you explain in the simplest of terms
Thanks
 
From the first post in this thread it seems to me that they are effectively cancelling the linkage between the mortgage and the current account - i.e. the only way to reduce your capital outstanding is by committing the funds to it as a capital repayment and not by simply leaving the money on deposit in the current account attached to the mortgage but still having it easily available.
 
Thanks Clubman
had read that but was not sure if there were to ways to pay
and whether it affected us or not.
Does that mean that we have eur250 mortgage with eur70 on deposit
that we are paying interest on eur250 and not eur180 every month?
Thanks
 
Up to now you had two options with a CAM, you either 1 - paid the same amount every month and any interest savings you made went towards reducing the term or 2 - the term stayed the same and the interest savings were used to reduce your monthly payments.
There is no change to the first option, and in the example above you pay interest on the 180 not 250. If you were on this option you will not have heard from First Active because there is no change in your current situation.
What is changed and what is the main subject of this thread is that First Active say their new IT system can no longer support the second option and are trying to get people to change away from it.
 
Hi, another pee'd off FA customer here.... my situation is a little different. I was approved for my mortgage with FA based on a 2 year discounted rate (first time buyer). So my prob now is : just as I go about drawing down on it - they inform me that this package is no longer available as I had not yet drawn down on the money - I was not sent any letter alerting me of this. I've signed my mortgage contract with my solicitor (based on the 2 year discounted rate). Where do I stand with this - the next best rate is 1 year discounted with them but will cost me an additional 100 pm in repayments.
 
I'm not a solicitor but I think the T&Cs of your loan offer give FA room to withdraw a particular product before drawdown. Have a look.

Did you deal with a broker? If so, the broker would have received communication from FA confirming that the product was being withdrawn.

Even if you were dealing directly with FA I agree that it would have been nice to be told that your chosen product was being withdrawn, but I don't think there's any legal obligation on them to keep open a particular product until all loan offers issued on that product close.
 
JFMurphy said...


Can this be right? What rate are they taking "ECB" to be? ECB + 2.25% would be 5% gross interest, if it's the same ECB rate as used for mortgages, i.e. currently 2.75%.

Seems too good to be true - borrow at ECB+0.75% and invest at ECB+2.25%.
 

Contacted my broker when I was about to draw down and was told then - he said he knew nothing about it - but I'm not really buying that. Really pee'd off.... don't need the stress of all this.
 
This thread has gone a bit quiet. I was wondering whether previous posters are going to accept FA's deal?

I'm no financial whiz but for me:

PROS:
1. You can keep your monthly payment low (probably lower than at present) by taking the interest only option for up to ten years.

2. The interest rate offered is very competitive on the tracker mortgage offered (ECB + 0.75%).

3. You can invest your lump sum in Deposit Money Market Account at an excellent rate of interest (ECB + 2.25%).

4. There's no cost to changing. Legal fees are paid (up to a grand).


CONS:
1. If you invest lump sum in deposit account, you must give one months notice to access your funds .So you can't dip in to it as you could with the facility account on the CAM. You also lose the laser card and (I think) internet banking.

2. You cannot pay monthly mortgage from the deposit account so must keep enough funds in another account to pay it.

For me, the interest rates offered both on the tracker mortgage and deposit account more than make up for the loss of flexibility.
In particular, as was mentioned before, by going interest only for the ten years on the tracker, and saving the balance of what you would have paid, there seems to be a considerable saving to be made.

Have I missed something? What do others think?
 
CONS:
3. You will pay DIRT on the interest from the Money Market Deposit Account.
 
Hi I got the same offer as everybody else above. And I have a few questions if anybody knows the answers

1.
Does any body know if First actives offer of with their Deposit Money Market Account (ECB + 2.25%) is better than rabo bank, northern rock and Aib and all the rest of the safe investments for your money?


2 since they are offering ECB+.75 tracker mortgage and ECB+2.25 for the Deposit account wouldn’t I be better off keeping as much money in the deposit account as possible and not pay down the mortgage.? As you would always be ahead by 1.5%

3.Out of pure interest is this offer better or worse that the original Standard CAM option if you happened to have a few quid in there?

Thanks
 
Hi, to clarify,
As someone who's just swapped over, if you take a +.75% tracker mortgage and the money market deposit account you are no longer using the current account mortgage product and thus you can build up your deposit/savings account all you like but it won't make any difference to the amount that must be paid monthly off your mortgage, they are not offset accounts.
Also I figure even after DIRT, you're earning currently 4% net in the money market account and paying 3.5% on your mortgage so at least for a change it's the right way around!! The money market account also has a one month notice period for withdrawls so you cannot use it as a banklink type of account.
S.
 
Shakespeare said:
Hi, to clarify,
and thus you can build up your deposit/savings account all you like
Click to expand...

Just to clarify, theres a condition on mine that the money market account cant exceed loan left, so check out if this is a limiting factor for you as well - it could well be.
 
I am currently in negotiations with First Active in relation to the changes to my CAM. Suffice to say I am not being offered the same deal as others who have posted here- I am only being offered a 0.95% tracker. For the purposes of working out the disadvantages to me/ advantages- can anyone explain to me how to work out the saving per month if we put our matured SSIA- approx 40K into the CAM current account and offset but use it to reduce the mortgage repayments per month? I.e how do I work out how much the mortgage repayment would reduce per month?
 
As far as I know the reduced monthly repayment option is no longer available, you best check it out with them.
 
Sure, I know they are trying to remove the option but that is my very point. I am trying to work out how beneficial this would be to me in order to effectively bargain with FA.
 
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