unfair mortgage charge?

Little_Pickle

My folks are looking at mortgage options.
Their current mortgage with Natwest ends April next year.
to move mortgage early they have told them it will cost £4k.
does this seem right?
thanks all,

LP
xox

castle96

this is called an 'early redemption/repayment fee'. It will be in the original T&Cs. Fair ?........ well it was disclosed up front. High cost to move now. Wait til next April ?

Little_Pickle

thanks Castle... I'll be looking at T&Cs.
Trying to get them to hold on until next April... change in finances recently and I'm doing everything I can to help find a way through so looking at everything!
thanks again!
LP

opinions4u

Sounds completely normal.

Sorry.

dunstonh

There is nothing unfair about an early repayment charge.

When you buy a mortgage deal, the bank has to finance that deal. Typically by using savers or institutional investors. The bank faces a potential loss if you pay the mortgage off early. So, to ensure the cost is not passed on to others and the bank doesnt suffer the cost, you have the early repayment charge.

The ERC is not hidden in any small print. It is disclosed in the charges section of the key features illustration and appears on the contract they sign. If you go to any website and look at the mortgage deals (fixed, discount, cashback etc - tracker is the one that typically doesnt have it) then you will see the ERC is mentioned.

In thier case, waiting until next April is almost certainly the best option unless any alternative can recover that £4000 in the remaining term of the tie in.