fixed mortgage exit fee?

fizzscone

Myself & wife are moving and looking to buy a new build...just found that a majority of lenders are looking for at least 85 deposit! We don't have this.

So we went into our current mortgage provider, RBS, and had a chat with them, turns out if we leave them they will charge us over £4000 to leave!! Is this correct? We have 2 years left of our current deal left.

Can you get round the exit fees or is there anyway of incorporating them into a new deal with another provider?

Thanks and as always any advice is much appreciated.

Ionkontrol

Most fixed rate mortgages have Early Redemption Charges. There is no way out of paying them, you signed the agreement.

dunstonh

had a chat with them, turns out if we leave them they will charge us over £4000 to leave!! Is this correct?

We dont have your contract in front of us but if they say it is £4000 then there is no reason to disbelieve that.

We have 2 years left of our current deal left.

And that is why you have an early repayment charge.

Can you get round the exit fees or is there anyway of incorporating them into a new deal with another provider?

Early repayment charges exist because you are repaying early. They cover the costs the lender will have by you not staying on the mortgage for the agreed terms. As it is you breaking the contract, you pay the charge. The lender has no reason to waive it. You can of course borrow the money on the new mortgage to cover the cost or use personal savings to pay it.

However, if you are doing a self build and struggling with money before you start then do you really think it is worth going into a project that typically sees people spend more than they expect?

fizzscone

Cheers guys, not struggling in the slightest dunstonh just thought it was quite a lot to pay.

somethingcorporate

It's usually a sliding scale based on when you took the fixed deal out, how long to run etc. They can be quite high, mine is about £7.5k on one property!

Have you talked to your current provider about porting your existing mortgage to the new property?

harvey115

I think the Early Redemption Charges usually apply when paying more then 10% of the mortgage. These charges should be listed in terms of % (percentage) of the repayment you make i.e. your full payment in the Key Facts document.

This charge is usually around 1% to 4% depending on which year of the fixed term you are in.

Best of luck

kingstreet

You're going to have to make a choice.

Port the rate to a new mortgage with your existing lender, putting down 15% deposit and avoiding the fees

or

Find a new lender for a 90% mortgage, paying the early redemption penalty to RBS from your sale proceeds.

Your call.