Avoiding early repayment charges

sportball

Hi guys,

I have recently been reviewing my finances and obviously my biggest outlay is my mortgage. I stupidly agreed to a 6.29% 5yr fixed rate in 2008. With current offers at more like 3% I could save approx £300 per month by switching.

The issue is that my mortgage provider have a £5700 early repayment charge. If I take this into account any savings I make are minimal.

Is there any way of getting the provider to forget this charge and switch me to a better product?

_Andy_

Probably not.

sportball

Thanks, I am glad I came on the Money Saving Expert forum

AMILLIONDOLLARS

He's right. Why would they want to forget about a £5,700 early repayment charge! The banks are there to benefit themselves, not the customer!!

AMD

sportball

What if I told them I lost my job and was having difficulty making payments. Would they check up on this?

beecher2

sportball wrote: »

What if I told them I lost my job and was having difficulty making payments. Would they check up on this?

They still wouldn't let you forgo the ERC - you've no way out of it I'm afraid.

lynnexxxo

sportball wrote: »

What if I told them I lost my job and was having difficulty making payments. Would they check up on this?

They would probably offer to take interest only payments for a few months.

You are not alone on wanting out of your fixed rate with interest rates as they are. And the mortgage providers know this. I've not once seen anyone of these boards report sucess in getting out of paying an ERC.

I know its not what you want to here .

dunstonh

You are not alone on wanting out of your fixed rate with interest rates as they are. And the mortgage providers know this. I've not once seen anyone of these boards report sucess in getting out of paying an ERC.

Many fixed rates are financed by investors money that is fixed as well. So, often the bank isnt making any more out of you and if you redeem it early the bank still has the liability to pay the investors or suffer a penalty themselves. (simplified the process a bit for easy wording).

sportball

Thanks for the comments. As you say it's not what I wanted to hear. But it's my fault for agreeing to a 5yr fixed rate in the first place. Cheers Guys

Thrugelmir

Overpay your current mortgage if you want to save money.

In the longer term the lower your LTV the better the rate on remortgaging.

sportball

I have a 50% LTV so that is not an issue. I also have an interest only mortgage and am paying approx £300 into a FTSE tracker ISA. I cannot afford to overpay at the moment unfortunately.