ERC - From 'fixed' to SVR?

krisc_2

Hi folks,

I'm about to enter the 3rd year of my 3-year fixed rate (5.75%) mortgage with Britannia.

Does anyone know if they wound allow me to pay the final year Early Repayment Charge of 1% which equates to about £1400, in order for me to move to their SVR which is currently 4.2%:rolleyes:. If they allowed me to do this (and the SVR doesnt rise!), I would save around £800 over the next 12 months (or more if the SVR drops!):j.

I suspect the ERC relates only to remortgagers and home-movers:o, but I thought I would ask the question anyhooz!

Thanks in advance.

KC
:beer:

Let_Us_See

I doubt it - but why not give them a call and ask?

Why do you " suspect the ERC relates only to remortgagers and home-movers:o, but I thought I would ask the question anyhooz!" Surely, when you took out your Britannia mortgage you were either re-mortgaging or a purchaser? Any reason why you shouldn't have an ERC?

krisc_2

I was a first-time buyer. What I mean is that I suspect the payment of an ERC only applies for someone wanting to sell-up and pay the mortgage off, or remortgage to pay it off. I don't want to pay off my mortgage yet. I would just rather be on Britannias SVR.

But yes, I will give them a call to check. Thanks for the post.

dunstonh

It applies to everyone whether they want to move or not.

Most lenders will not waive the ERC unless they want shot of you or you. There have only been a handful of successes posted on the forum and a few had no details and some of us suspect they were not genuine or the terminology was mistaken.

krisc_2

The thing is, i am actually WILLING TO PAY the ERC that applies to my mortgage, however I am not aiming to remortgage or move home. I'm not querying if Briannia would WAIVE the ERC (i know they wont), I simply want to move on to Britannia's SVR which would save me money over the next 12 months (5.75% fixed rate vs 4.2% SVR -subject to change!).

It's probably a long shot, but i'll give them a call this week and let y'all know how i get on.

Thanks for the replies.

Let_Us_See

You don't mention your loan to value and if it isn't too high and you are willing to pay the redemption penalty then there are better re-mortgage options available than Britannia's SVR.

Jez-_2

I am going through this exact process with HSBC. I paid a 2% ERC to move onto their tracker product (2.95%) from a 6.4% fixed product in its second out of three years.

There was absolutely no question of whether it would be "allowed" or not, if it had not been i would simply have remortgaged with someone else. Abbey are offering good rates at the moment too (2.24+BoE iirc).

dimbo61

They will charge you the ERC to get out of your current deal and I doubt if they will let you go onto there SVR

krisc_2

Hi again,

Just called Britannia. It's a no-goer. They wont allow me to transfer to the SVR even if I pay the ERC. Just as I suspected, the payment of an ERC only relates to those who want to pay off their mortgage by means of selling-up or remortgaging.

Jez - as I said - I am not wanting to remortgage, I was only wanting to move to the SVR which is currently lower than my current fixed rate. Britannia would allow me to pay the ERC if I was selling-up or remortgaging.

'Let Us See' - you're correct, there are much better deals out there than Britannia's SVR. Unfortunately though, I bought my modest home as a first-time buyer at the peak of the market in 2007. So my LTV is probably just over 90% now and I cannot afford the deposit to remortgage at 70-85% LTV (together with the ERC/arrangement fees/booking fees/etc etc....) where the better deals can be achieved.

I dont have a problem with ERCs in principle and I can afford my current monthly payments. Its difficult looking at the lower rates out there at the moment whilst stuck with my fixed rate, but hey ho!

Thanks for everyone's input. I hope the post has helped others out there who may have had the same query.

Kris.

Jez-_2

krisc wrote: »

Jez - as I said - I am not wanting to remortgage, I was only wanting to move to the SVR which is currently lower than my current fixed rate. Britannia would allow me to pay the ERC if I was selling-up or remortgaging

I realise that, same situation as me, i didnt want to remortgage but did want to get rid of my high fixed rate in favour for the BoE+2.45% tracker. I was just giving you my experience of doing the same thing as you seek to do, but with HSBC.

I will note however that HSBC did have to issue a whole new mortgage document, and i had to meet their new products LTV through a new valuation of the property. So perhaps the reason they have said no is not because of their policies as such, but because you perhaps do not meet their guidelines for the SVR product?

krisc_2

Jez, you have effectively remortgaged!