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Original poster

Early mortgage exit

42 replies

Daveismyhero · 29/10/2023 07:36

Any mortgage people on here?
We're in the process of buying a new house (new build if that makes a difference) due to complete and move in late December. Current fixed mortgage term is up at the end of January. Mortgage advisor has came back to us today and said our current mortgage has an early exit charge of 3500. Are they seriously going to make us pay that for the sake of 5 weeks and 1 mortgage payment? We can't afford to find that money and will have to back out of the sale if that's the case and with a baby on the way it's the last thing we need as pur current house is just not suitable.
Does anyone know if there are any ways around this or they'd let us just pay the final payment early? Obviously I'll ring the bank tomorrow but its worrying me today

OP posts:
missmollygreen · 29/10/2023 08:03

So are you buying the new build outright, with no mortgage?

Overthebow · 29/10/2023 08:05

Can you port your existing mortgage, or delay the completion on new house until the end of your fix?

LizzieSiddal · 29/10/2023 08:11

Overthebow · 29/10/2023 08:05

Can you port your existing mortgage, or delay the completion on new house until the end of your fix?

Was going to suggest this, could you stay with family for a month inorder to delay the purchase of new house?

Original poster
Daveismyhero · 29/10/2023 08:21

LizzieSiddal · 29/10/2023 08:11

Was going to suggest this, could you stay with family for a month inorder to delay the purchase of new house?

Show quote history

So we're part exchanging our house for the new build. We can't port our current mortgage unfortunately. We've been in touch with the new build Co.pany to ask to delay a month but I have a feeling they want to complete before Christmas. We weren't planning on staying with current lender as the new rate they've quoted us is almost 1.5% higher than other lenders. It just seems ridiculous that they'd be able to get away with charging us almost 3k to end the term 5 weeks early when our final payment would only be 600. We need the funds from this house released for the deposit on the new house

OP posts:
LizzieSiddal · 29/10/2023 08:27

Firslty do talk to your mortgage provider, they may be sympathetic. If that doesn’t work speak to the house builder, tell them mort company will not budge and ask them if they will. Builders are desperate to sell at the moment so I’m sure they would rather sell to you a month later, than you drop out.

Overthebow · 29/10/2023 08:35

Ask your mortgage provider if they can waive the fee or lower it, but you have to be prepared that they may not as you entered into a contract and those are the terms. They don’t have to do anything about it. Your builders may have more flex as yes, they may want to complete before Christmas, but if you can’t then they likely won’t want to lose the sale.

DoodleMum12 · 29/10/2023 08:41

I’d say speak to your current lender as rates have been reducing lately. When was the last time you checked what rate they can offer you if you stay with them? From
experience they won’t reduce or waive the fee if you don’t stay on. It doesn’t matter what the circumstances are. It’s breaking a contract early.
Alternately, like others have suggested, speak to the builder and explain the situation.

Original poster
Daveismyhero · 29/10/2023 08:43

DoodleMum12 · 29/10/2023 08:41

I’d say speak to your current lender as rates have been reducing lately. When was the last time you checked what rate they can offer you if you stay with them? From
experience they won’t reduce or waive the fee if you don’t stay on. It doesn’t matter what the circumstances are. It’s breaking a contract early.
Alternately, like others have suggested, speak to the builder and explain the situation.

We checked only yesterday. Annoyingly they are offering better rates to new customers than existing. We will ring them tomorrow but I'm just getting so worried today that we may lose out on this house for the sake of 5 weeks

OP posts:
winniethedoo · 29/10/2023 08:44

I'm surprised your mortgage adviser didn't explore this at the outset if you're taking a new mortgage, fairly standard clause when you're on a fixed rate. I'm pretty sure you'll need to pay it unfortunately, unless you can hold up the sale/purchase.

winniethedoo · 29/10/2023 08:45

Although to be fair, maybe you're still in the early stages.

Hitchens · 29/10/2023 08:49

Daveismyhero · 29/10/2023 08:21

So we're part exchanging our house for the new build. We can't port our current mortgage unfortunately. We've been in touch with the new build Co.pany to ask to delay a month but I have a feeling they want to complete before Christmas. We weren't planning on staying with current lender as the new rate they've quoted us is almost 1.5% higher than other lenders. It just seems ridiculous that they'd be able to get away with charging us almost 3k to end the term 5 weeks early when our final payment would only be 600. We need the funds from this house released for the deposit on the new house

Show quote history

whilst it is a frustrating situation for you due to the way the timings have fallen, the building society isn't 'getting away with anything' really is it? They are applying the terms of the mortgage agreement you accepted in that if you settle within your fixed rate period that there will be a charge payable. The charge is there because the bank had planned on you paying all of your payments during the fixed mortgage period that would give them their return on investment.

It might seem unfair being only 5 weeks difference, but really where should they draw the line where they done apply their terms?

You could ask them if they would waive it as a gesture of good will, but I don't see why they would especially as you are leaving and going to another lender.

I think your best bet would be to try and delay completion on your new house by 5 weeks. Of course the developer wants you to complete sooner but in reality what are they going to do? (as long as you haven't exchanged contracts and agreed a completion date). There alternative is to find a new buyer that completes before you will - unlikely.

Twiglets1 · 29/10/2023 08:49

I would delay the sale by a month if your current lender can’t come up with a solution.

The Seller won’t be able to sell it any quicker anyway so may as well stick with you even if they’re pissed off at the delay.

Original poster
Daveismyhero · 29/10/2023 08:49

winniethedoo · 29/10/2023 08:44

I'm surprised your mortgage adviser didn't explore this at the outset if you're taking a new mortgage, fairly standard clause when you're on a fixed rate. I'm pretty sure you'll need to pay it unfortunately, unless you can hold up the sale/purchase.

Thing are moving pretty fast to be fair as we're doing a part exchange so theres been no waiting for our house to sell etc. We only paid reservation fee on new house a week ago and signed the part ex agreement. However, I've not been that impressed with advisor so far as we've managed to find better deals ourselves online than he's found us

OP posts:
Hitchens · 29/10/2023 08:51

Daveismyhero · 29/10/2023 08:49

Thing are moving pretty fast to be fair as we're doing a part exchange so theres been no waiting for our house to sell etc. We only paid reservation fee on new house a week ago and signed the part ex agreement. However, I've not been that impressed with advisor so far as we've managed to find better deals ourselves online than he's found us

Show quote history

How did you find your mortgage advisor? Was it one via the developer?

Raisinnola · 29/10/2023 08:53

Are you sure this is a correct figure OP? The early exit charge decreases as time passes, for context, ex P and I are selling and our early exit fee was about the same amount as yours to exit the mortgage 2.5 years early and has consistently decreased as time passed. It would be negligible with 5 weeks to go.

Toooldtoworry · 29/10/2023 08:54

@Daveismyhero where are you with the legals? Have the searches been requested, etc because if they haven't then you're highly unlikely to be in by Xmas unless you have a super speedy local authority.

Before you stress about the mortgage company I'd be talking to your conveyancer to see if it's even viable to move so soon.

Hitchens · 29/10/2023 08:55

Raisinnola · 29/10/2023 08:53

Are you sure this is a correct figure OP? The early exit charge decreases as time passes, for context, ex P and I are selling and our early exit fee was about the same amount as yours to exit the mortgage 2.5 years early and has consistently decreased as time passed. It would be negligible with 5 weeks to go.

It is usually based on the number of years on any product I've ever had. So being 5 weeks is still the same as 11 months.

Toooldtoworry · 29/10/2023 08:55

Raisinnola · 29/10/2023 08:53

Are you sure this is a correct figure OP? The early exit charge decreases as time passes, for context, ex P and I are selling and our early exit fee was about the same amount as yours to exit the mortgage 2.5 years early and has consistently decreased as time passed. It would be negligible with 5 weeks to go.

I'm with Santander. My exit fee is 5% level until the day the fixed rate ends. Not all lenders are the same.

Raisinnola · 29/10/2023 09:17

Oh wow, I just assumed they’d all work similarly, that’s a sickener!

Original poster
Daveismyhero · 29/10/2023 12:13

Toooldtoworry · 29/10/2023 08:54

@Daveismyhero where are you with the legals? Have the searches been requested, etc because if they haven't then you're highly unlikely to be in by Xmas unless you have a super speedy local authority.

Before you stress about the mortgage company I'd be talking to your conveyancer to see if it's even viable to move so soon.

Things are moving pretty quick as we are using the same solicitor as the builder, we have a new mortgage in place etc. The date of December was given by the solicitor

OP posts:
Londonscallingme · 29/10/2023 12:17

Just tell them you need to wait until Jan; they won’t want to lose the sale.

Twiglets1 · 29/10/2023 12:20

Daveismyhero · 29/10/2023 12:13

Things are moving pretty quick as we are using the same solicitor as the builder, we have a new mortgage in place etc. The date of December was given by the solicitor

Show quote history

It's not for the solicitor to decide the date though. That is negotiated between the buyer and the seller so I think you're going to have to say you can't move until your current mortgage comes to an end (if your lender won't show any flexibility)

Toooldtoworry · 29/10/2023 12:22

Truly sounds like a conflict of interest. Have you had the searches back yet? Have you discussed with the solicitor timelines?

OfMark87 · 29/10/2023 12:28

Check with your current mortgage lender they may have some clauses in place as your in the last few months of your fixed rate.

You might find a loophole that you can maybe pay majority of the current mortgage off without any charges and then let the last payment go out in Jan. or something along those lines.

Or you might be able to re-negotiate the completion date with the builder.

Toooldtoworry · 29/10/2023 12:39

OfMark87 · 29/10/2023 12:28

Check with your current mortgage lender they may have some clauses in place as your in the last few months of your fixed rate.

You might find a loophole that you can maybe pay majority of the current mortgage off without any charges and then let the last payment go out in Jan. or something along those lines.

Or you might be able to re-negotiate the completion date with the builder.

You won't be able to do that because they won't release the charge on your current property without the whole mortgage being repaid.