Northern Rock & NRAM & Early Repayment Charge

arif50

I got a mortgage with Northern Rock in Feb 2007 - the interest rate was fixed for 5 years at 5.75%

The early repayment charge - during this period - is £5,400

Right now I need a bigger place and plan to sell the current property - i'm trying to avoid having to pay the 5k.

I called NRAM and this was the first time I fully appreciated that they are doing no new business at all and porting the mortgage or getting a new deal from them and avoiding at least some of the fee is not an option.

I've looked online and seen some talk of ERC being paid for you by NRAM at the start of the year - but sounds like they stopped doing this!

Any advice appreciated - main questions are:

1. Is there anyway to avoid / negotiate reduction of the ERC in a fixed term mortgage when it was clearly in the original contract?

2. Does the fact that I have just 12 months of the 5 years left - or not?

3. Anyone had any experiences of doing something similar with Northern Rock / NRAM

4. Do I have any grounds for complaining given that I am being forced down this route somewhat due to the whole norther rock / NRAM saga?

Thanks in advance, and merry christmas everyone!

arif50

Anyone have anything that may help with any of the above?

Gorgeous_George

Hi

This thread (link) Post No 1256 suggests it is bad news.

You can but ask.

Good luck!

GG

ghrbikeman

I am in a similar position and spoke to NRAM today. There seems to have been some changes in their policy. They told me if I could get a motgage offer to match the one I have with Northern Rock (value) then they would wave the ERC. I was told that he wasn't sure whether this policy change would be advertised or only given when mortgage holders rang.

This is unlikely in todays market for me so it seems I will have to pay the ERC although I could log a complaint in the mean time. I was then told that I wouldn't get a response to my complaint for about eight weeks as there are so many!!

Thrugelmir

ghrbikeman wrote: »

This is unlikely in todays market for me so it seems I will have to pay the ERC although I could log a complaint in the mean time. I was then told that I wouldn't get a response to my complaint for about eight weeks as there are so many!!

Complaint on what grounds?

The ERC is a contractual liability.

funbags

Don't give up on this! I wanted to port my mortgage to a new property but as NRAM were not lending more funds this meant that I couldn't move the mortgage and had to pay an 8k ERC. I complained to NRAM and was told that this still applied and no refunds were available, I then continued the complaint process to the Financial Ombudsman and just received confirmation that NRAM are refunding my ERC in full. No argument they just caved as soon as the ombudsman contacted them.

Keep complaining and hopefully others will have the same result!

Ju&Mel

Really, any more details on your case
We want to move, but will require additional funds so we are in the same situation as yourselves

Thrugelmir

Ju&Mel wrote: »

Really, any more details on your case
We want to move, but will require additional funds so we are in the same situation as yourselves

Perhaps somebody in same position as yourself who wishes the FO deluged with complaints.

The ERC is repayable unless NRAM waive it.

funbags

Not really someone who wants to see the FO deluged!

Our situation was that we wanted to borrow more money, are very credit worthy and borrowing well within our means. Our mortgage was portable to a new property if the lending was increased at that time without any ERC payable. I called NRAM and was told that I didn't meet their lending criteria any more, basically because they weren't lending any more! This meant no mortgage with NRAM and an ERC became payable on redemption.
I felt that this was unfair and I was now having to shell out 8k that I could think of better things to do with!
I complained that the T&Cs of our mortgage weren't being adhered to as despite them saying I didn't meet the lending criteria, this was actually their fault for going bust in the first place, not mine!

If you meet the criteria then I think you probably have a good case, don't give up and use the ombudsman, that's what they are there for, they certainly seemed very happy that they had helped me and got a good result, not miserable that their services were "deluged" with valid complaints....

Thrugelmir

funbags wrote: »

Our mortgage was portable to a new property if the lending was increased at that time without any ERC payable.

Then you had a very clear defined contract clause.

Will they refund your ERC when you move and show evidence of the increased borrowing?

Ju&Mel

funbags wrote: »

Not really someone who wants to see the FO deluged!

Our situation was that we wanted to borrow more money, are very credit worthy and borrowing well within our means. Our mortgage was portable to a new property if the lending was increased at that time without any ERC payable. I called NRAM and was told that I didn't meet their lending criteria any more, basically because they weren't lending any more! This meant no mortgage with NRAM and an ERC became payable on redemption.
I felt that this was unfair and I was now having to shell out 8k that I could think of better things to do with!
I complained that the T&Cs of our mortgage weren't being adhered to as despite them saying I didn't meet the lending criteria, this was actually their fault for going bust in the first place, not mine!

If you meet the criteria then I think you probably have a good case, don't give up and use the ombudsman, that's what they are there for, they certainly seemed very happy that they had helped me and got a good result, not miserable that their services were "deluged" with valid complaints....

We are in this exact situation, our 5 year fix ends in November, we would liked to have ported + extra borrowing, our Together mortgage is £130k total, we have been told on our income we could get a mortgage for around £165k. We have approx £20k saved to move, but will have little choice to but to repay NRAM as we still need/want extra borrowing.
Thanks for your help