Basically we have a mortgage with a lender who charges 3% if you redeem early- fair enough but these are not proportional to the amount of interest/mortgage already paid and will mean that when we redeem the mortgage (work relocation so no option but to sell and they won't let you port to a help to buy property which we have no choice but to purchase as new city is far more expansive than current location)
We wanted them to make the fee more proportional, as how it stands at the moment we will end up swing charged in fees and total interest more than we paid over the 18months we will have been here!!
I think that if the early repayment charges were illustrated up front on the mortgage offer, then you don't have a leg to stand on, sorry. ERCs aren't designed to be proportional to the amount of interest you have already paid.
That's interning as our independent financial advisor said we had a strong case but he advised doing it through a solicitor which I'd like to avoid so I was wondering if anyone had done it before and how they went about it?
Is this the IFA that advised you on the original mortgage? I would think the only case you might have is against the IFA, if they arranged you a mortgage knowing a work move was likely within the product period, or in some other way didn't take your needs into account correctly when selling the mortgage.
Sadly as it's a civil servant role it was relocate or be made redundant! As I've just had a baby we can't take that financial hit.
The advisor we spoke to stated that if a bank is unable to port a mortgage because they don't have a product available BUT you meet the lending criteria for their other products and are in a situation where you have no choice but to redeem there is precedent for waiving a proportion of the fees. We are hoping for an appropriate % or nominal amount. A solicitor could do this for us but their fees may end up being quite a lot.
Basically it means we'd have to pay the bank £10k in fees even though we've paid £6k in interest so they would 'benefit' from our early redemption by ££££! There is only 6 months of our mortgage left.
We were told of the 3% but stupidly thought it was 3% of the value of the remaining term. At this rate it's almost financially better off for my OH to be made redundant which is gutting.
Contact the mortgage company ask them if they will waive the ERC if you remortgage with them on a new property. Some do offer that option but will charge you at the redemption and then refund it after the new mortgage is in place.
Playing grownup - do you mean porting the mortgage? We can't as the costs of buying in the new location are so so much higher than where we currently live. We would need a 90% mortgage but the monthly payments would be huge. With HTB we put down 10% and govt 20% which makes months payments considerably less for 5 years. I have two in nursery at the moment and this totals £1200 a month! In two years time I will only have one in nursery and in 5 years time none in nursery so the value of the additional 20% in 5 years is not an issue- it's our current situation that makes a 90% mortgage virtually impossible
They may waive the fee if you take the help to buy mortgage with them (not porting your existing mortgage) but I worked within a bank for years and never saw / heard of a mortgage redemption fee waived simply because of the customer feeling it was proportionally unfair.