Bradford & Bingley - Redemption Penalty?

oscarsacco

Afternoon all,

Hope you're having a great weekend.

We're considering moving home (it's home, not just an investment!) and so are happy to swallow a loss on the value of our place, so long as we make it up on our purchase.

Our mortgage is 5 year fixed with B&B, which we're 3 years into. Great rate and, ideally, we would be staying with them - the deal was portable when we took it and we now need to move to get our eldest into the right school. However, as you will be aware, they are not lending any additional funds - even to existing borrowers. This puts us in a tough position as our redemption penalty is currently £8k! We really want to stay with the lender and not incur this penalty.

Given that B&B's lending has been nationalised, one would hope that they would jump at the chance to get rid of £300k worth of liability to the UK taxpayer. Would they still insist on taking the penalty, given these circumstances?

Many thanks for any advice.

feisty1

Call 0870 607 2072 & speak to them u may be pleasantly surprised however if you feel they are holding out for the redemption penalty remind them of TCF Treating Customers Fairly. TCF is something the FSA are very hot on and is very topical at the moment.Check yr original offer on the section re' additional borrowing. Also one u've called them maybe post the outcome on here as others must be in the same circumstances

_Andy_

It's nothing to do with TCF - no company is obliged to provide further borrowing.

opinions4u

_Andy_ wrote: »

It's nothing to do with TCF - no company is obliged to provide further borrowing.

The may not be obliged to provide additional funds.

But at the same time it would be a little unfortunate for a state owned mortgage provider to refuse a new mortgage and insist on an £8k penalty along the way!

Hardly in the spirit of fair.

oscarsacco

Thanks for the replies. common sense dictates that there is a deal to be done here - but, especially now that B&B is state owned, how liwherekely is common sense to prevail!?

Any further advice/thoughts welcome. As an aside, who thinks that there should actually be incentives offered by B&B/Northern Rock for borrowers to take their loans elsewhere? And lighten the burden on the public purse? Certain privately-owned lenders have already done this to boost their liquidity.

opinions4u

oscarsacco wrote: »

As an aside, who thinks that there should actually be incentives offered by B&B/Northern Rock for borrowers to take their loans elsewhere? And lighten the burden on the public purse? Certain privately-owned lenders have already done this to boost their liquidity.

I share the sentiment.

Unfortunately, the liquidity is now totally underwritten by HM Government. So isn't an issue to the survival of the business.

The privately owned businesses needed to reduce their mortgage books or go out of business.

I do think in these specific circumstances they should be cutting you some slack though. It may be that something does happen over the coming weeks to help reduce the B&B mortgage book.

Unfortunately, shafting borrowers like you may help to offset losses from their buy-to-let book.

influential

I'm in a similar boat as the OP - I have a 5 yr fixed rate at 4.99 that I was hoping to reduce. Just came off the phone from Mortgage Express CS dept to be told that, despite nationalisaton, they cannot waive any early redemption penalties. Oh well...

Will be interested to hear if anyone succeeds.

feisty1

they cannot waive any early redemption penalties.quote

Why should they? You signed a legal agreement applicable for 5yrs?

dunstonh

It would be a bit unfair to get them to waive it. You get the deal and in turn you agree to stay for the tie in. Getting the deal and then getting out free is just greedy

magburner

oscarsacco wrote: »

Afternoon all,

Hope you're having a great weekend.

We're considering moving home (it's home, not just an investment!) and so are happy to swallow a loss on the value of our place, so long as we make it up on our purchase.

Our mortgage is 5 year fixed with B&B, which we're 3 years into. Great rate and, ideally, we would be staying with them - the deal was portable when we took it and we now need to move to get our eldest into the right school. However, as you will be aware, they are not lending any additional funds - even to existing borrowers. This puts us in a tough position as our redemption penalty is currently £8k! We really want to stay with the lender and not incur this penalty.


Given that B&B's lending has been nationalised, one would hope that they would jump at the chance to get rid of £300k worth of liability to the UK taxpayer. Would they still insist on taking the penalty, given these circumstances?

Many thanks for any advice.

Why don't you offer to backdate to their SVR and give up the benefit of lower fixed rate for the last 3 years? They may let you off then

RufusFrog_2

dunstonh wrote: »

It would be a bit unfair to get them to waive it. You get the deal and in turn you agree to stay for the tie in. Getting the deal and then getting out free is just greedy

I'm not sure I agree. If the mortgage lender's broken their side of the agreement (the deal is portable to another property during the redemption period), then why should they be able to apply the penalty?
Trouble is, the portability stuff may just be in the glossy waffle, rather than in the strict legal Ts and Cs. Check it out as you may have a case if they are in breach of contract.

A couple of other things: you may be able to port the mortgage at the current level and get a second charge to top it up from another lender, although the rate will not be great. If all else fails you could rent somewhere and rent your own place out (and the local school may not be as horrendous as everyone says it is; but then again, maybe it really is that bad ).