Takeaway that's taken four months to deliver

The packaging of Nationwide's Takeaway remortgage makes a proud boast: "It's quick, it's easy." I beg to differ. Almost four months after I took home one of the society's mortgages in a bag I'm still waiting to complete on my loan.

The application process began back in May when my boyfriend and I decided to move from our tracker mortgage to a fixed-rate deal. At the time I was editor of What Mortgage magazine and I was expecting a series of interest rate hikes. The remortgage would protect us from rising payments, allow us to release equity to pay off a personal loan and reduce our total monthly outlay.

On our existing mortgage we were paying 4.75%, but as it was pegged to base rate plus 0.5%, it was bound to go up with interest rate rises. So I picked the Nationwide building society's two-year fix at 4.99% - the same rate we would pay after just one increase. A free valuation and free legals meant the only upfront cost was a £249 reservation fee. Even if rates didn't increase in the near future we would reduce our total monthly outgoings from £933 to £837.

I was told we would get a mortgage offer in two to three weeks. Filling in the forms was easy - although not everything we needed was in the original pack - and on May 28 I handed them in, together with a cheque to reserve the rate.

My fears about rate rises were confirmed the next week, when it went up to 4.5%, and my existing mortgage went up to 5%, costing us £950 a month. Still, we expected that by mid-July, our new deal would come through.

But I noticed that after three weeks the cheque for the fees had not been cashed, so I rang the branch. Several calls later, I discovered to my shock that our application was still sitting on someone's desk.

A month further on and we still hadn't received a mortgage offer from Nationwide - only an agreement in principle, which we could have achieved online in just one minute. Worse news was to come, when the base rate went up again in August, pushing our existing mort gage up to 5.25% - the very eventuality we wanted to avoid by re-mortgaging. Finally, on August 25 - almost three months after I took the forms to the branch and nine weeks after they were sent to the processing centre - the mortgage offer arrived.

Earlier this month we were sent the mortgage deed which we signed and returned to the solicitor, and we are currently awaiting completion. Our repayments in September totalled £968 - £130 more than we expected to be paying at this point - and each day we wait to complete our mortgage accrues interest at 5.25%. When we handed in our application in May we didn't expect to be still remortgaging in September.

This was a straightforward application: we live in a leasehold flat, but that's not uncommon; neither is releasing equity. We produced proof of earnings and bank statements at the beginning and even provided extra information like the address of the freeholder. So what went wrong?

Obviously the lost three weeks at the beginning of the process didn't help, but had that been the only problem we could have expected to remortgage by mid-August. The real hold-up seems to have happened in the society's Northampton processing centre, which, according to spokesman Steve Blore, struggled to keep up with a huge volume of business taken in the summer months.

"We had some very competitive deals available over the summer and there was a two-week period where we took £1bn worth of business in addition to what we expected to get in," he says. This, says Mr Blore, "led to them taking a longer time to process the applications." He admits we're not the only people to be kept waiting, but claims not many will have experienced the same total delay.

It seems to me that the branch staff should have been made aware of the problem and warned customers that things might take longer than usual.

Mr Blore says: "I'm sure that if we came across a situation where things were slowing down we would let the branches know" - but evidently the backlog at the processing centre did not ring alarm bells. The agreement in principle we received in three weeks should normally be sent in the few days after the application is received, but it seems even when there are delays the same standard letter is sent out, promising an offer within two to three weeks.

Mr Blore assures me the backlog has been cleared and that 70% of customers applying now for a Takeaway remortgage can expect to receive an offer in 14 days. The remaining 30% would be well advised to call their branch and chase up their offer. As we found, if you sit back and assume everything's going according to plan you could find yourself paying your current rate for some time to come.

Any chance of compensation?

If a delayed remortgage means paying a higher rate for several months, you have grounds to complain, says Ray Boulger, senior technical manager at broker Charcol.

"If, due to a lender's poor administration, you end up paying extra it's definitely worth asking for compensation," he says. "If they refuse before October 31, I would take the complaint to the mortgage code arbitration scheme, and after that to the financial ombudsman service."

To stand a chance of getting compensation you need to have co-operated quickly with the lender's requests for information - if forms have been sitting on your desk for three weeks before being returned you are unlikely to get any sympathy from the regulators.

Borrowers who will be paying their lender's standard variable rate (SVR) until their remortgage can be completed, should find out if their lender offers a CAT-standard mortgage, suggests Mr Boulger. These tend to have lower rates than the SVR, and the lender cannot charge an arrangement fee or redemption penalties.

Rather than stay on the higher SVR while you organise your remortgage, you spend a couple of months on the CAT-standard deal.

How to speed things up

Be organised before you visit a lender or broker. Dig out recent payslips and your P60 and your most recent mortgage statement before you begin the application process.

"Many people don't have these to hand and that can cause a delay while the new lender gets an employer's reference and a reference from your existing lender," says Rob Clifford, managing director of broker Mortgageforce.

If you're in a rush, approach a lender with a reputation for efficiency - Cheltenham & Gloucester, for example, aims to move from application to offer within a week. Others known to turn things round quickly include Newcastle and Leeds & Holbeck building societies, plus specialist lenders GMAC.

Intermediaries tend to have a good idea of the quickest lenders. "This is an area where brokers can score," says Ray Boulger of broker Charcol. "We can say to a client 'this is the best deal but it is likely to take four to five weeks to get an offer, what do you want to do?'"

Armed with this information you can decide what is more important - the rate or speed of service.

A broker can also lean on a lender. "Because of the amount of business we do with them we can bang on the desk and make things happen," says Mr Clifford. But direct customers can influence the process too, he says. "If you chase your application along it can go through more quickly."