Help!! Redemption fee dispute, advice required

sw1_3

Hi,

I have just redeemed a mortgage with Leeds Building society, I borrowed 120,000 of them as a repayment mortgage 2.5 years, interest is calculated daily on the mortage, at the beginning of the year my balance was £113,000, in total I have made over £20,000 worth of payments on this.

I was expecting a redemption fee of around £1000.00 due to wording in my contract, instead I got hit with a £5000.00 redemption fee. In total they charged my £118,000 to repay the mortgage.

My problem is that I think they have messed this up and I'm not sure what to do, They have charged me 5% of the balance owed.

This isnt worded in the contract, surely it would state I have to pay 5% of what I owe.

IN MY CONTRACT IT STATES THE FOLLOWING UNDER THE REDEMPTION SECTION

IF THE ADVANCE IS REDEEMED OR PARTIAL REPAYMENTS OF CAPITAL ARE MADE ABOVE 5% OF THE REMAINING BALANCE BEFORE 31/03/2009, THEN AN EARLY REPAYMENT CHARGE OF 5%(OF THE AMOUNT REPAID) WILL BE CHARGED AT THE SOCIETY'S STANDARD VARIABLE RATE.

To me this states I have to pay 5% of what I have repiad, this was just over 20,000 so 5% would be around £1000.

I've phoned them twice and they have fobbed me off, do you think I have rights here and they have messed up?

If so what action can I take.:mad:

Optimist

Write to
Compliance Department
Leeds Building Society
105 Albion Street
Leeds LS1 5AS
Tel:0113 225 7657
Fax:0113 216 7289

If your not satisfied with the response you can then take it to Ombudsman

sw1_3

Thanks, I would appreciate it if people could tell me how they interpret the wording, have I missed something?

I was planning to go and see Citizens advice and also right a letter to Leeds & Holbeck to the address kindly provided by optimist.

Thanks,

Stuart

Raggie

sw1 wrote:

IN MY CONTRACT IT STATES THE FOLLOWING UNDER THE REDEMPTION SECTION

IF THE ADVANCE IS REDEEMED OR PARTIAL REPAYMENTS OF CAPITAL ARE MADE ABOVE 5% OF THE REMAINING BALANCE BEFORE 31/03/2009, THEN AN EARLY REPAYMENT CHARGE OF 5%(OF THE AMOUNT REPAID) WILL BE CHARGED AT THE SOCIETY'S STANDARD VARIABLE RATE.:

To me it says that before 31/03/09 you may repay up to 5% of the loan without charge

Any payment above 5% of loan (this wil linclude repayment in ful) will incurr a charge of 5% of that amount.

You repaid the full amount therefore you are charged 5% of the full amount.

Assuming this reads as i intended..

Cara79

Hi

If you have redeemed the mortgage, then the amount repaid is the £113,000 roughly or whatever was outstanding. Therefore, 5% of this figure is just over £5,000 which works out to be correct.

For example: If i now redeemed my mortgage (£86k), which is half way through a 2 year fixed period, I would pay x% on the amount repaid. THe amount repaid is the £86k - not the amount you have been paying over the last year.

I hope this is understandable - hard to put down in writing!

Sorry it's not better news.
Cara

sw1_3

Hi,

Thanks for your response Cara, the way you have put it is very clear and makes sense.

If I owe them the money then I have no problem with that, I obvioulsy read the contract to mean the amount of what I have actually paid.

I've already paid the sum and pretty much accepted that was that so I'm glad to get a clear answer

Cara79

No worries sw1. I must admit, when I first read your post I agreed with you and could see where you are coming from.

However, then re-read it and unfortunately that's the way it is - wish it wasn't though!

Glad it makes sense though. Even though perhaps not what you wanted, like you say, at least you understand it and can therefore accept it.

We live and learn eh?!
Cara

regularsaver1

It would have made sense if you had only paid off £20k. but not if you cleared the whole mortgage

homer_j_3

The wording does mean that if you repay above 5% of your remaining balance you will be charged 5% on the amount you repay. If you repay it all then you will pay 5% of that amount.

However, I know that another lender has similar wording and the FSA have ruled in favour of the borrower but you need to argue your point through their internal complaints procedure and they escalate it to the Ombudsman. You may succeed - you may or you may not but at least you will have tried