Final Repayment Charge

Daddy_Bear

I've been charged an FRC by Barclays/Woolwich for porting my mortgage!!

On my off it said that this fee was payable upon redemption but I hadn't realised that included porting my mortgage.

I think this is ambiguous to say the least. What do Money Savers think?

:mad:

david29dpo

Read you contract?

Daddy_Bear

How am I supposed to know if prorting is no diiferent to redemption until I do it?

My argument is that I have ported not redeemed it.

The fact that I have a new account number is to do with their admin systems and nothing to do with me.

rsykes2000

Daddy_Bear wrote: »

How am I supposed to know if prorting is no diiferent to redemption until I do it?

You ask someone at the mortgage lender ?

Richard_Webster

This is a common problem for solicitors. Nearly every lender (Virgin One the exception?) requires us to pay them back the whole amount of the old mortgage and they send us the whole amount of the new one - they don't simply send us the difference!

We ask lender for a settlement figure for old mortgage and they give us a figure which includes a penalty. This is because usually the people who send out the figures don;t know that there is a new mortgage being started on another proeprty under a different account number. As solicitors we may suspect porting is happening but we can never be sure unless the lender tells us.

We often have to write specifically to the lender saying that there is a new account number.... and if the redemption of the old mortgage and the start of the new are at the same time will they confirm the penalty is not payable. We can't rely on what our clients tell us because if they get it wrong we are stuck with finding any shortfall because we will have given an unconditional undertaking to discharge the mortgage to our buyer's solicitors.

In this case the figure probably does not allow for possible porting. The only lender I know that actually connects the systems up on this is Northern Rock who will give a figure which assumes that a specified new account is completed at the same time as the old is paid off. Trouble there is you have to add it on if they don't take place at the same time!

I've just looked at a Halifax statement that has a note at the bottom along these lines: "This account contains an early settlement penalty. If the borrower completes a new loan including product XYZ123 for a loan of £XX,XXX at a rate of X% at the same time as redemption of th is mortgage the early settlement penalty of £Y,YYY may be deducted from the figure above." All we need to do then is look at the mortgage offer on the purchase to see that it does indeed contain a product XYZ123 for £XX,XXX at X% and we can deduct the penalty.

Milliewilly

Daddy_Bear wrote: »

How am I supposed to know if prorting is no diiferent to redemption until I do it?

My argument is that I have ported not redeemed it.

The fact that I have a new account number is to do with their admin systems and nothing to do with me.

Bizzarre - I have a woolwich mortgage thats portable (base + 0.17!) so obviously I am keen to keep hold of it. My advisor at the woolwich has told me they keep the account number the same to keep the same rate.

If the mortgage is not transferred straight away (only have 6 month window) simply ring up with the account number to get it reactivated. I have just checked my terms and the wording is ambiguous in that if you pay the mortgage back there is an admin fee (in my case £275) so technically you have paid it back on your old property even though it was purely a paper exercise. If you ring up and complain they may refund you.

Daddy_Bear

I have written twice and they do not see my point. Its the Financial Ombudsmen next which will probably cost them £300 so I dont see why they dont just refund me.

parallax_20

Daddy_Bear - You should have been told of the cost of moving your mortgage over to a different product. There is no difference in porting or redeeming on your existing mortgage as its a closure of the account and setting up a new one. You may have also been charged an application fee for the new mortgage too.

When I was with Halifax and wanted to move to a different product, I was aware that there would be some costs involved, including paying an application fee for setting up the new mortgage. These are the costs that should be taken into account before transferring to any new deals, as the cost of moving may counter acts against the small percentage saving by taking up a new mortgage deal. Especially if you switch every 2-5 years if you're on fixed rate.

Although having said that, some banks do waive the administration costs for switching between their own products (normally one or the other), but probably no so much now.

Banks are in the business to make money. What benefit does the Bank have in allowing you to move to a cheaper rate product for free? Yes it saves you some money, but gains them nothing, so making a loss. Think about it!

Richard_Webster

I have written twice and they do not see my point. Its the Financial Ombudsmen next which will probably cost them £300 so I dont see why they dont just refund me.

I think we need to know a bit more about OP's position.

Did he take out a new mortgage with the same lender at the same time as paying off his old one?

If he did, were the terms of the loan for the amount of the old mortgage the same or was the interest rate etc different?

Milliewilly

parallax_20 wrote: »

Daddy_Bear - You should have been told of the cost of moving your mortgage over to a different product. There is no difference in porting or redeeming on your existing mortgage as its a closure of the account and setting up a new one. You may have also been charged an application fee for the new mortgage too.

When I was with Halifax and wanted to move to a different product, I was aware that there would be some costs involved, including paying an application fee for setting up the new mortgage. These are the costs that should be taken into account before transferring to any new deals, as the cost of moving may counter acts against the small percentage saving by taking up a new mortgage deal. Especially if you switch every 2-5 years if you're on fixed rate.

Although having said that, some banks do waive the administration costs for switching between their own products (normally one or the other), but probably no so much now.

Banks are in the business to make money. What benefit does the Bank have in allowing you to move to a cheaper rate product for free? Yes it saves you some money, but gains them nothing, so making a loss. Think about it!

The OP is talking about a portable mortgage ie exactly the same mortgage moved or 'ported' hence the name to another property. I too have a portable mortgage with the Woolwich and have been told the A/c number stays the same. We need to know if the OP has kept everything the same i.e just transferred the balance of mortgage over from the old property to the new?

Daddy_Bear

I did a simultaneous port keeping the same balance and rate for the existing loan and paid an application fee for the additional borrowing.