Early repayment charges.

bede

Please can anyone help. The Royal Bank want to charge me £3000 to get out of my mortgage deal early. Are these charges covered by the recent ruling indicating that banks penalty charges should not be excessive?
Any help or advice would be appreciated.

cattie

You have to pay the charges I'm afraid. When you took out the mortgage you signed that you agreed to the terms & conditions that were attatched to the mortgage offer.

If you don't want to pay early redemption penalties on a mortgage in future then you need to be sure you chose a morgage that doesn't carry penalties of this kind, though you don't get the best deals with these.

TangentMan

As cattie says you will have to pay.

Just for clarity (because this comes up from time to time) those charges are not a penalty. They are your part of the deal that the bank offered you and i presume were clearly stated up front and the condition in which they are incurred. The charge is typically linked / derived from some sort of benefit you have had (such as a discounted rate) that the bank would "like back" (to use a crude term) since you are terminating your end of the preferential deal contract early.

The OFT ruling is regarding those charges that are either disproportionate to the risk / incovenience caused to the bank. In mortgage terms the closest are arrears / late payment fees and - possibly, exit fees known as Deeds / Redemption fees.

Hope this helps.