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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

to challenge the bank on £18k mortgage redemption fee?

55 replies

lindylayton · 03/02/2016 20:44

I know mortgage redemption fees are part of the contract we signed and usually not waived. In this scenario I wonder if I have a small chance of getting anything back because -

a) we signed a 2 year deal, and are redeeming only 6 weeks before the 2 year deal is up.

b) we are forced to redeem 6 weeks before 2 year deal is up because the buyer of our house needs to avoid the new stamp duty increase coming in on 1st April. Our exit date for the mortgage is 31st March !!!

Please share your thoughts and advice, thank you!

OP posts:

bumbleymummy · 03/02/2016 20:47

Is it definitely for the full amount? Some lenders' fees reduce as you get closer to the end of your contract.

FishWithABicycle · 03/02/2016 20:48

Why on earth wouldn't you arrange contracts for the sale to go through on 31st March then? The buyers pay the lower rate of stamp duty and you don't have to grapple with the bank?

Boleh · 03/02/2016 20:49

Talk to the bank, our redemption fee is a combination of the amount outstanding and the term outstanding. If you are buying a new property you could possibly port the mortgage across for the remaining period.

Original poster

lindylayton · 03/02/2016 20:50

If we redeem on or before the 31st March we are liable for the redemption penalty - this is the wording on the mortgage.

OP posts:

FantasticMax · 03/02/2016 20:52

Is it definitely the full amount? Are you not transferring the mortgage onto your new property, surely this would avoid it?
If it was me I would be finding another buyer, I would not want to swallow £18k so that my buyer gets to pay less stamp duty.

SnowBallsAreHere · 03/02/2016 20:52

This reply has been deleted

Message withdrawn at poster's request.

bumbleymummy · 03/02/2016 20:52

Have you actually spoken to them about it yet? As Boleh said, you might be able to port the mortgage for the remaining term or it may not be as much as you think this close to the end of term...

OneMagnumisneverenough · 03/02/2016 20:56

Are you buying another property? Keeping the mortgage on and securing it against your new property even temporarily would be the thing to do - speak to the lender and clarify exactly what your options are.

Original poster

lindylayton · 03/02/2016 20:56

We can't port the mortgage, and if we complete on the 31st we pay the redemption fee, because we are redeeming on the 31st March.

We can't really find another buyer ... this one was difficult to find and took some time.

OP posts:

eurochick · 03/02/2016 20:58

How much is the stamp duty increase? If less than 18k you could offer to pay it.

OneMagnumisneverenough · 03/02/2016 20:59

I'm presuming you cant just keep the mortgage and pay it for the remaining 6 weeks of the contract term as you can't have it secured on the property that you don't own. Would it be possible to pay the remaining 6 weeks mortgage payments in advance in order to release the contract? Have you had someone legal look at it for you?

jessplussomeonenew · 03/02/2016 21:01

Bridging loan? They're pricey but should be less than this.

troubleinstore · 03/02/2016 21:03

Keep the mortgage for 6 weeks and take out a bridging loan for your new mortgage? ?

ceeveebee · 03/02/2016 21:04

Have you spoken to them - we sold our house recently and I thought our penalty would apply right up to the end of the mortgage but apparently it didn't apply in the last calendar month (Nationwide).

If it does apply, you should ask your buyer to share it with you as they are benefitting from the saving in stamp duty increase

LIZS · 03/02/2016 21:08

Which is less the additional stamp duty or the redemption fee? Offer to reimburse the buyer if it saves you longer term.

peggyundercrackers · 03/02/2016 21:11

Offer to pay difference on their stamp duty

Original poster

lindylayton · 03/02/2016 21:19

Stamp duty is £36k ...

OP posts:

Sunnyshores · 03/02/2016 21:20

If you have correctly assessed the redemption penalty, then Im afraid theres not a chance in hell of them letting you off it.

ceeveebee · 03/02/2016 21:23

£36k extra? Or £36k in total

Have you actually spoken to your building society?

If the penalty will definitely be applied, I would tell your buyer you can't complete until after the 1 April unless they contribute towards the penalty so an extra £9k on the asking price. They're still saving a substantial amount

bakeoffcake · 03/02/2016 21:28

I was also going to suggest asking the buyer for 9K.

But phone the bank first.

Original poster

lindylayton · 03/02/2016 21:33

36k extra. Buyer is purchasing our house as an investment so second property.

Will try calling bank and possibly writing a letter, I just wondered if anyone else had successfully challenged something like this. It's a shame it's not a sliding scale as we're soooo close to the end of the term.

Direct hit as a result of the new stamp duty laws, and we're not even the ones buying a 2nd property :-(

OP posts:

lastnightiwenttomanderley · 03/02/2016 21:35

Am I right in thinking your buyer is having this as a second home, hence the deadline? I'd ask them for a chunk of it too.

AandAmom · 03/02/2016 21:41

Most mortgage providers allow you to switch products with them 3 months before your current deal ends and so if you could switch to a variable rate product with no early repayment fees (can be sorted over the phone in about an hours phone call and comes into effect on the 1st of the following month so 1st March ) when you then redeem your mortgage on the 31st you will have no fees.

TremoloGreen · 03/02/2016 21:43

They do have some flexibility with it as we were reimbursed our fees when we repaid our mortgage, even though it was outside the 6 month deadline for 'porting' and we switched to a different product with the same lender. Bit of a different scenario to paying off early and not continuing a lending relationship though. Worth asking though or seeing if you can reach a deal like this.

Zebrasinpyjamas · 03/02/2016 21:43

Are you going to buy something else soon ish? Nationwide would give me back my fees and "restart" my mortgage if I completed I the new place within 6 months of selling the first. Might be worth asking?

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