Nationwide Early Repayment Charges - Help Please

Malibu_Girl

Hi

We have had a mortgage with the Nationwide for a number of years and took out a 5 year fixed mortgage with them over 4 1/2 years ago. We sold our house in December and it was agreed that they would port the mortgage to our new property at the same rate for the remaining 9 months (this was back in December). On the day we were due to exchange, the people we were buying from pulled out and to keep our buyers (we didn't want to let them down as they had already had one sale pull out and they are first time buyers) we have agreed to move into rented accommodation. We have already lost money because of our purchase falling through in the way of Solicitors fees and survey costs, plus we are now locked into a minimum renting period of 6 months which is going to eat into our cash that we had for a deposit. Now we are also going to have to pay an ERC to the Nationwide of £5k despite there only being 5 months left of the fixed term (the exact same amount we would have had to pay if we had ended the fixed term a few months into the 5 year fixed contract).

I am well aware of the terms and conditions of ERCs, but I cant help but feel this is harsh considering the situation. I have spoken to the Nationwide on the phone but have been told by one of their advisors that they would not be able to move on this despite my situation.

I really cannot see how they can justify charging me this full fee when there is only 5 months left. I believe from the office of fair tradings website that you should only pay the lender their costs and losses caused by the breach, which for that 5 months would be nothing like what they are charging. Bearing in mind that we were on a fixed interest rate of 6.08% which compared to the interest rates have been over the last 5 years, they have made an awful lot more money out of us in that period.

Any advice or experiences please before I take this higher with the Nationwide.f

Thank you.

betmunch

Its in the T&C's I cant see them moving on this to be honest.

They are entitled to this penalty and its writing in big writing, not tucked away in some unknown leaflet that never sees the light of day.

They will point to the fact that you did not HAVE to sell you house, and that the portability option is subject to current underwriting criteria, which you seem to have failed.

Your best course of action would have been to not sell, or if determined to sell, appeal against the decline. Although an appeal rarely overturns the decline.

Malibu_Girl

Hi, thank you for your response. I do understand what you are saying and I have had mortgages for over 20 years, so I know all about early repayment fees and what you sign for etc. Im not trying to get out of paying it, I just feel that I shouldn't have to pay the full fee bearing in mind there is only 5 months of it left. We could have not sold, but it took us ages to sell our house and prices have gone down since we sold it, we were also relocating to be closer to my work.

A quote from the Office of Fair Trading's website:-

"A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations"

That to me implies that a mortgage lender cannot charge you more than the actual costs or losses they incurred (which would be the differential between the rate you paid and their standard variable rate).

I will challenge this decision, but just wanted to get some feedback from others before doing this to see if anyone had any similiar experiences or advice.

cattie

Personally, I would expect to be charged the full fee that I agreed to as a condition of the mortgage.

Fixed rate mortgages are normally at a preferential rate and as you admit, you realise they do come with penalties because of this.

It's unfortunate that you lost the house that you were buying & I wish you luck in challenging the charge, but fear you won't get anywhere as if they agreed to reduce the contracted amount, they would be opening the floodgates to others who have found themselves in the same position.

Thrugelmir

Malibu_Girl wrote: »

I will challenge this decision, but just wanted to get some feedback from others before doing this to see if anyone had any similiar experiences or advice.

No point in challenging. As you signed the contract and agreed to the terms of the mortgage offer. The NW will not be held accountable for your misfortune.

Simon_gloster

Thrugelmir wrote: »

No point in challenging. As you signed the contract and agreed to the terms of the mortgage offer. The NW will not be held accountable for your misfortune.

Generally ERC's are waived on porting.......if you go back to them in 6 months time will they refund your erc then put you onto the variable rate you would have gone onto?

The other circumstance on full erc waiver is death of a borrower on full payment using a life policy.

All this office of fair play or whatever is pointless and a waste of time. Challenge it by all means.....you'll get nowhere. Sorry to be blunt, if I was a lender, 5 months left or not, i'd make you pay.
As previous posts, solution........dont move home regardless of youe situation as its not Nationwides fault.

HARSA

HARSA

Thrugelmir wrote: »

No point in challenging. As you signed the contract and agreed to the terms of the mortgage offer. The NW will not be held accountable for your misfortune.

I am happy to see that you're giving people very good and constructive advices as oppose to the harsh one liners you use to throw at people. Well done Thurg

macca789456

Nationwide want it both ways it appears i signed up to a ten year fixed rate and have had to pay the e r c and go elsewhere halfway through the ten years. They say they have no products available but they clearly have for "new customers only" especially, who can get a very good deal out of them. My terms and conditions clearly say i can pay the e r c and transfer to another product now they conveniently say there is no products available. Apparently so i have been told they changed there terms and conditions in 2009 regarding this but i was not informed about this and i clearly should have been so i could decide what to do at the time before these so called new terms and conditions came into effect. Has anyboby else been made aware of this change.

Thrugelmir

HARSA wrote: »

HARSA

I am happy to see that you're giving people very good and constructive advices as oppose to the harsh one liners you use to throw at people. Well done Thurg

Still do. If its a factual comment.

poppy10_2

macca789456 wrote: »

Nationwide want it both ways it appears i signed up to a ten year fixed rate and have had to pay the e r c and go elsewhere halfway through the ten years. They say they have no products available but they clearly have for "new customers only" especially, who can get a very good deal out of them. My terms and conditions clearly say i can pay the e r c and transfer to another product now they conveniently say there is no products available.

You can still pay your ERC and go elsewhere. Nationwide have no obligation to offer you an alternative deal, and made no promises that they would have other deals available when you signed your contract.

macca789456

terms and conditions are there for a reason, they clearly state i can pay my erc and transfer to another product. As they changed the terms and conditions in 2009 they should have wrote and told there customers so they write and tell you every little detailed change usually. Also they have loads of products available to everybody else people on trackers for instance can change mid term new customers (only) can get cashback deals of up to 400 pounds only people on fixed rates are penalised. Also erc's are factored into the product if you want to leave early when you take it out.