Mortgage early repayment charges, can I do anything?

Hi,

I am terminating a mortgage in February. It had a 3-year fixed rate period and an early termination charge of about 6300. However, when I terminate the mortgage there will be only 3 payments of 800 outstanding. Do I have any case / mechanism for moderating the early repayment fee? What if I paid the 2400 up front? If I have a case, how do I go about it?

I will be unable to defer the actual transaction until the 31/5/07 when these charges cease to apply. Possible some sort of paper deferment might be arranged.

TIA for advice.

Reply to
PeterHall
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Would the Unfair Terms in Consumer Contracts Regulations apply? Clearly any such charge needs to bear some relation to the loss they sustain as a result of your not going the whole 3 years. Accordingly, I'd have thought that there would be a cap on this "penalty" at the level of the interest they'd lose out on.

As a matter of interest, why not?

Reply to
Ronald Raygun

Why don't you discuss this with the lender?

Rob Graham

Reply to
Rob graham

I meant /08 of course!

The reason is that I would lose the buyer who needs to be in quickly. I'm moving, not remortgaging.

Thanks for the >

Reply to
PeterHall

It's TML/ Kensingtion whom I went to because I didn't have clear residential planning permission. They offer to abate the redemption charge if I do another mortgage with them but I'd prefer a high-street lender, my own bank in fact.

Reply to
PeterHall

Since the charge is pretty high, why not take out another mortgage with them and then, when the penalty period is over, remortgage to a high street lender of your choice? Although this might cost money it shouldn't cost

6,300. Presumably the 'abatement of charges' is another way of saying the mortgage is portable, but for how long does the early redemption penalty period last - more than just the next two or three months?

Rob

Reply to
Rob graham

Yes it would.

A charge that is more than the remaining payments would not be enforcable.

It would surprise me if the lender didn't know this and act accordingly, without prompting.

tim

Reply to
tim.....

Virtually every 'special rate' mortgage has early redemption penalties such as '3% of the value of the loan if redeemed during the special rate period, e.g. 3 years'. Are you saying that NONE of these are enforceable if the redemption takes place during the later months?

Rob

Reply to
Rob graham

Bitstring , from the wonderful person Rob graham said

Nope, what he's saying is that it can't cost you any more to bail out 3 months from the end than it would cost you to make the last 3 monthly payments and then bail out. I mean you could just give the bank the last

3 month's cheques and say 'cash them at your leisure', which comes to the same thing (except your debt is not discharged that way).

What's their excuse for wanting more than that? .. 'it'll cost us money if we get our capital back too soon, we'll have to find somewhere to store it'??

8>.
Reply to
GSV Three Minds in a Can

Could you not defer the sale by 3 months but let him move in early? In the meantime he would pay you 3 month's rent which might cover your bridging loan should you need one in the circumstances.

Reply to
Ronald Raygun

Penalties which exceed the real cost to the bank of the redemption are not enforceable, whatever the timing.

Reply to
Fergus O'Rourke

How times have changed. When I sold my first house in 1967 my solicitor was furious that my lender, a small building society imposed a charge of three months interest to compensate them for early payment. Derek.

Reply to
GeorgeE

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