Northern Rock + Redemption Penalty

enzorocket

Dear Forum...
Not sure if anyone has had any experience of this or can maybe help / advise....?

Due to some financial difficulties back in 2006 i fixed my mortgage for 5 years which at the time was a relief as we knew exactly what to expect each month. Whilst lots of people have been enjoying very low interest rates since then, we have still been paying 4.79% but have mucked on through.

Our deal is due to expire Nov 2011, i spoke to Northern Rock (who are now NRAM) yesterday regarding this who have told me they will not be able to offer any new products due to the change in their circumstances, so we will have to go on their standard variable base rate when the time comes or move to another provider.

If we move provider or sell our property now we get to pay nearly £14,000 in redemption charges but i was wondering if there was any legal grounding on the deal no longer being a legal binding document due to the fact that NR have now changed company name to NRAM and are no longer able to support loyal customers like myself with new products. I was going to ask them for the small print on the mortgage deal gain to see if anything was written into them - but would also appreciate any help, advice, discussion that any other members may be able to offer.

thank you.

enzo.

Meeper

The terms of the mortgage is not that they guarantee to offer you something new at the end of the fixed term. The terms of the mortgage are that you will have a fixed rate for 5 years and then the remainder on their SVR which is currently 4.79%.

Why can't you wait until November when there is no penalty and then re-mortgage elsewhere?

enzorocket

thank you for your quick reply. We have been desperate to move for a good few years - space is very tight! I know its not too long to wait now - what worried me was that they had nothing to offer us at the end of the term and if i had the opp. to get out now i would.

Meeper

For me, you should wait until the penalty has expired, to be honest. It will fly by, believe me!

It's not that you will suddenly have a problem at the end of the term and your mortgage will stop. It will keep going, but on the SVR instead.

In my humble opinion, you tied yourself into a deal for a set period of time and you shouldn't really be able to benefit from coming out of that deal early without paying the penalty. They are not forcing you to move.