Council's towering payment oversight

I bought my Islington council flat, on the twentieth floor of a tower block, under the right-to-buy scheme in 1996. Banks wouldn't lend on it so I had to take a mortgage with the council at 9 per cent. Despite other mortgage rates falling dramatically, mine has stayed the same.

On checking my statement in May, I noticed that a payment was missing, even though I pay by standing order. I contacted the council but received only a letter saying that mortgage administration had just been transferred to an outside agency. The council now refuses to do anything with mortgages and the agency won't deal with something that happened before it took over.
JG, London

Of course this is Islington's responsibility. It has now found your lost payment, which went missing during the switchover to the outside agency. Your account is up to date.

Local authorities have to charge borrowers whichever is higher - the government-set rate, currently 5.91 per cent, or the amount it actually costs them to borrow.

Islington says that its cost of borrowing fluctuates between 9 per cent and 11 per cent in the longer term. It could reduce a customer's mortgage rate only if it were able to restructure its total debt to a lower cost.

You might be able to find a cheaper mortgage. A few lend on tower block flats, depending on the construction and state of the building, how high up the flat is and the percentage of owner-occupiers.

Approach Abbey National, Halifax, Nationwide and Cheltenham & Gloucester. Before making a full application and getting credit-checked, ask them to check with their panel of valuers to see if the lender has given a mortgage on similar flats before. If the first says no, try another as attitudes do vary.

Isa fee gets feet itching

I have Isas with Alliance & Leicester, which is introducing a £25 fee in October for switching. Should I move now, as I fear I might be trapped in poor interest rates later?
DM, Brighton

Alliance & Leicester (A&L) is introducing this exit penalty 'to reflect its administration costs'. Most Isa providers impose no penalties on savers moving to competitors' accounts. Of those that do, most require just a notice period. Those that deduct interest or charge a fee do so mainly with fixed-interest Isas.

A&L's Isas pay 3.6 per cent. It won't make any promises about future rates but says it wants to stay com petitive. The best rates with no exit penalty are Kent Reliance paying 4 per cent, Scarborough Building Society at 4 per cent on Tessa-only Isas and 3.8 per cent on mini-Isas, and Safeway's 3.95 per cent on mini-Isas.

You have nothing to lose by moving to an account without penalties because you can switch again if it becomes uncompetitive.

Freeserve cost me dear

Last year I tried, via Freeserve website, to change the address of my original email address to a shorter one, but received a message that the process had failed. I abandoned the change as I was going abroad.

On my return, I noticed Freeserve was charging me twice, over-charging by £155.89. The second address seemed to have been set up anyway.

I cancelled the newer one and asked for a refund. They offered me £40 as a goodwill gesture. I refused this as my effort to set up a new address had resulted in a 'failed' notice.
C O'C, Bristol

Freeserve has now refunded you £155.89.

Number's up for students

Recently my son applied for a student bank account from HSBC. A week later he received a letter telling him that his application had been refused because his credit score was not high enough. This surprised me. Students tend not to have much money so how can they build up a high credit score? The bank was unable to give us a reason for the refusal, but a couple of days later they checked the submission they had made to their credit-scoring department and found that they had not included a telephone number for my son. They re-submitted with the number and this was enough to swing the balance in favour of giving him an account.

So it seems that if you want a student bank account you need a phone number - strange when most local bank branches do their best to pretend that they haven't got one - at least for incoming calls.
JK, Telford

· Email Margaret Dibben at money.writes@observer.co.uk or write to Margaret Dibben, Money Writes, The Observer, 119 Farringdon Road, London EC1R 3ER and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.