Early Repayment on Mortgage

Leila

I had a fixed rate mortgage with Northern Rock, we sold our property after 1 year so we had to pay an early repayment fee. We didn't buy a new property straight away but were told as long as we wrote to them they would keep our mortgage open and once we purchased a new property we'd get back the early repayment fee.

After contacting them to confirm this was still accurate they asked us to confirm in writing that this is what we wanted to do and it was still all ok and there was no problems, this was approx 1 month ago. They then called and said that they've changed their policy and we are no longer entitled to this money back. During this time we've received no notification of this and they've said the policy changed at the beginning of this year. (after we sold our house)

We now have to write and appeal their decision.

Can anyone advise me where to go from here and who I should speak to regarding any legal advice?

Thanks

dwsjarcmcd

Usually lenders have a set time when they will refund these fees - say 6 months. They would not have kept it open indefinately, which you should have been told.

How long is it since you redeemed the mortgage and what how long was the original fix for?

MarkyMarkD

Leila

Almost definitely the practice of waiving the repayment fee if you take out a replacement mortgage was discretionary and not contractual. Accordingly, you won't get anywhere seeking legal action against NR.

dws is quite right that there are normally time limits for these things. NR should have made that clear up front when you paid the repayment fee. Presumably you have something in writing about the discretionary waiver policy?

Leila

Thanks for your replies.

We purchased the property in June 05 and sold in Aug 06 on a 5 yr fixed deal. We were told that they would keep our mortgage open for 3 months but would extend every 3 months up to a 1 year if we haven't found a property.

We were then told in January 06 we needed to confirm in writing that it was to be extended which we did straight away. NR then called to say that we were out of the 3 month period therefore we are not eligble for the money back.

We then contacted them again and NR told us numerous times that getting our money back shouldn't be a problem and they were just agreeing a time limit for an expire date.

Today they've said that we are definitely not entitled to it. He has listened back to the conversations no one had actually agreed to the refund, however, one person had agreed and he doesn't have access to this record.

MarkyMarkD

It's pretty academic IMHO whether they have previously told you that they will extend for a full year. The penalties are contractual and the discretionary waiver of them is discretionary so they can change their mind.