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mrcow wrote:Interesting about the mortgage redemption figure. Are you implying that it is fair for a company to impose a highly inflated penalty charge (that the lender is "able" to increase at any point during the ongoing agreement) on a customer for terminating a contract?
Well I wouldn't use the words 'highly inflated' but I think it is entirely appropriate that there is a penalty charge for ending a contract early - it has cost the lender money to get you that loan and they can expect to recover their investment and make a profit over the loan term, if that is cut short it is only fair to be penalised.0 -
mrcow wrote:Interesting about the mortgage redemption figure. Are you implying that it is fair for a company to impose a highly inflated penalty charge (that the lender is "able" to increase at any point during the ongoing agreement) on a customer for terminating a contract?
It is an early redemption fee rather than a penalty clause. You have take out, say, a 25 year contract and you have decided to break that contract early. The bank gives you the option of being let out of the contract early for a fee or not being let out of it.
Many companies will have a break contract fee be it a non-refundable deposit or X months of subscription fees etc.All posts made are simply my own opinions and are neither professional advice nor the opinions of my employers
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Tootsie_Roll wrote:Well I wouldn't use the words 'highly inflated' but I think it is entirely appropriate that there is a penalty charge for ending a contract early - it has cost the lender money to get you that loan and they can expect to recover their investment and make a profit over the loan term, if that is cut short it is only fair to be penalised.
It's been estimated that it actually costs a lender £65 to redeem a mortgage. Some lenders are now charging up to £300 for doing this. IMO it is an unfair penalty charge.
They are charging five times the estimate. If this isn't "highly inflated" then I don't know what is!"One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
Tootsie_Roll wrote:In addition to these you were ending a contract early seems only reasonable that you pay some penalty.
Fees shouldn't be punitive though and this is why so many people are clawing back their bank charges. A charge should be based on the cost to the insurer and not act as a deterent.0 -
Astaroth wrote:It is an early redemption fee rather than a penalty clause.
Hi
They will charge it to you anyway at the end of the mortgage, whether you are redeeming early or not."One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
I know on Credit cards you can cancel the PPI but I have a loan from Nat West (I know. It was one of their hard sells... I mean "account review" meetings). Can I cancel the PPI on it? I don't see why not and as I am on the last year of payments i don't owe a huge amount (Nothing my sharesave schemes can't cover) should I fall ill whatever???"A goldfish left Lincoln logs in me sock drawer!"
"That's the story of JESUS."0 -
CYBERCIDERSAVER wrote:I know on Credit cards you can cancel the PPI but I have a loan from Nat West (I know. It was one of their hard sells... I mean "account review" meetings). Can I cancel the PPI on it? I don't see why not and as I am on the last year of payments i don't owe a huge amount (Nothing my sharesave schemes can't cover) should I fall ill whatever???
Even if you could cancel, I doubt you'd get any significant money back at this stage, so you may as well keep the insurance and learn for next time.
It's worth calling them to ask the question (if it's a "No", they'll tell you outright), but don't cancel it if you're not going to be any better off (and often, you won't be) as you'll just lose the benefits of the insurance without any financial gain."One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
mrcow wrote:It's been estimated that it actually costs a lender £65 to redeem a mortgage. Some lenders are now charging up to £300 for doing this. IMO it is an unfair penalty charge.
They are charging five times the estimate. If this isn't "highly inflated" then I don't know what is!
You not making an accurate comparison.0 -
ArchieB wrote:Fees shouldn't be punitive though and this is why so many people are clawing back their bank charges. A charge should be based on the cost to the insurer and not act as a deterent.
Again you're not making an accurate comparison - In any event in this instance the lender is losing all the interest they can charge over the whole loan period so actually we get off very lightly. And don't simply assume that they can lend the same money to someone else.0 -
"One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0
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