Early termination mortgage fee

[Mrr T]

Has any one had any experience of negotiating these down.

I am on a fee of about £3.8k to terminate. Now may have a buyer and lively completion is 4 months before the end of the fixed period. Moving abroad so no option to roll over. Monthly payment is £140. Since the BS will be in the money on the redemption any chance of getting the fee reduced, say if I make the outstanding monthly payments to the end of the fixed period?

[Sarnie]

Lenders do not negotiate on what you have both previously agreed to.

[cliffords]

Agreed it was stated up front how it would be calculated. What would you have to negotiate with?

[2 GKC]

Sounds like a hefty penalty on what must be a tiny mortgage

[ChevronB19]

Bank of Ireland scrapped my redemption fee, 1 month before we moved to new house and a different mortgage provider. So it can happen (our mortgage advisor [local one man band] sorted it for us). You can only ask (but I do defer to Sarnie as the expert, just pointing out my own experience).

[trickywoo]

2 GKC said:

Sounds like a hefty penalty on what must be a tiny mortgage

27 month’s equivalent penalty. We either don’t have the full story or op was a mug to sign it with a move abroad etc. on the cards.

[cliffords]

Was it a long period fixed rate and you are leaving very early on?

[Sarnie]

cliffords said:

Was it a long period fixed rate and you are leaving very early on?

It doesn't seem that it was, the OP says when he redeems the mortgage he will be 4 months away from the end of the fixed rate.

Lenders don't negotiate, whether you are 2 months or 6 months away from the rate expiring, they abide by the T&C's that you both agreed to at the outset....

[keith333]

Can you exchange contracts with the buyer and complete closer to your mortgage end date? You could maybe rent it, so that they would cover your mortgage payments too.

We have a BTL mortgage expiring with Birmingham Midshires and they won't let us repay the mortgage a day earlier than fixed period without paying early termination fee.

[Mrr T]

Sarnie said:

cliffords said:

Was it a long period fixed rate and you are leaving very early on?

It doesn't seem that it was, the OP says when he redeems the mortgage he will be 4 months away from the end of the fixed rate.

Lenders don't negotiate, whether you are 2 months or 6 months away from the rate expiring, they abide by the T&C's that you both agreed to at the outset....

I was just wondering if anyone else had tried. My request to reduce the fee will be based on the new Consumer Duty regulations which apply since 31st July and that the fee is a penalty not an estimate of damage.

Edited by Mrr T on Sunday 15th October 13:50

[Cats_pyjamas]

Can you remortgage with your current lender early, to a variable rate mortgage, then pay the balance off on completion? (Often variable rate mortgages do not have an erc).

[Mrr T]

trickywoo said:

2 GKC said:

Sounds like a hefty penalty on what must be a tiny mortgage

27 month’s equivalent penalty. We either don’t have the full story or op was a mug to sign it with a move abroad etc. on the cards.

You have the full story on the termination fee. There are good reasons why I signed up. Mainly due to delays in moving due to Covid and my previous lender would not roll over my mortgage because I was retired. Even though they had said they would 2 years before I retired.

[Sarnie]

Mrr T said:

I was just wondering if anyone else had tried. My request to reduce the fee will be based on the new Consumer Duty regulations which apply since 31st July and that the fee is a penalty not an estimate of damage.

Edited by Mrr T on Sunday 15th October 13:50

You took your mortgage out before Consumer Duty regulations came into force.........

[Sarnie]

Cats_pyjamas said:

Can you remortgage with your current lender early, to a variable rate mortgage, then pay the balance off on completion? (Often variable rate mortgages do not have an erc).

No, because to remortgage early he would incur the ERC.......

[Caddyshack]

Cats_pyjamas said:

Can you remortgage with your current lender early, to a variable rate mortgage, then pay the balance off on completion? (Often variable rate mortgages do not have an erc).

Ypu would then have to pay the current product penalty.