Exit fees on 2 mortgages over 1 property - HELP!!

RemortgagerOne

Nearly 5 years ago I took out a repayment mortgage of £108,000 on my property, worth £270,000 - the oustanding balance is currently £100,000. This was a 5,74% capped rate with the Co-op.

Last year we had a loft conversion and had to take out a £40,000 repayment mortgage to pay for it. We wanted to put this inot OJE loan but were told ther would be an exit fee for the £108,000 mortgage if we did so , so therefore we were tied to taking out a separate mortgage with the Co-op for the additional £40k, which we did for 5 year fixed rate.

What we were not told is that the two separate mortgage deals would be combined into the one mortgage acccount.

Now as the £108,000 mortgage is coming to an end and the Coop rates are rubbish we want to move elsewhere but have been told that we have to pay a £1,500 exit fee for the £40k loan!!!!

We want to move just the £100k to another lender but it looks like we are tied to the Coop or pay the exit fee.

This is unfair as we were not made aware of the fact it would become ONE mortgage (as we actually requested one deal for the whole debt!!) but were told it would be 2 separate deals.

What can I do?
Can I avoid the exit fee anyway?

absolutebounder

"This is unfair as we were not made aware of the fact it would become ONE mortgage (as we actually requested one deal for the whole debt!!) but were told it would be 2 separate deals."

I take it you didnt read the documentation. You are breaking the agreement on the second deal.
Why is it people always try to complain and pass the blame on to someone else for their own stupidity?

RemortgagerOne

It wasnt our stupidity - we requested it be brought into one and they said, no it has to be two. So the arrangements on "one" were irrelevant to us asn we were told it would be two mortgages/accounts.

Had we been told it was going to be one then we would have took out a 1 year deal to align the 2 mortgages thereby negating a penalty.

MarkyMarkD

That's a bit harsh, absolutebounder, but I slightly agree with the gist of what you are saying if not the words you use.

You have a single mortgage on your property, with two sub-accounts.

If you want to remortgage, you obviously have to pay off both sub-accounts as they are both part of the same mortgage. You can't move your primary sub-account (on which the penalty is ending) and leave the secondary sub-account (which still has a penalty) where it is.

When you took out the further loan, you should have realised that you were tying yourself in longer than your primary sub-account.

I can't see that Co-op have done anything wrong.

All you have to do now is to switch your primary sub-account to a product with a term less than or equal to the remaining term on your further loan, and then when the two penalties both end you will be free to go.

Dithering_Dad

absolutebounder wrote: »

"This is unfair as we were not made aware of the fact it would become ONE mortgage (as we actually requested one deal for the whole debt!!) but were told it would be 2 separate deals."

I take it you didnt read the documentation. You are breaking the agreement on the second deal.
Why is it people always try to complain and pass the blame on to someone else for their own stupidity?

I wouldn't concern yourself what this moron has to say. After he had a rant at me I checked out his other posts and he seems to go from one thread to the next trying to cause arguments (hence his signature, which should read "Don't argue with me cos I'm not worth it").

MarkyMarkD

RemortgagerOne wrote: »

It wasnt our stupidity - we requested it be brought into one and they said, no it has to be two. So the arrangements on "one" were irrelevant to us asn we were told it would be two mortgages/accounts.

Had we been told it was going to be one then we would have took out a 1 year deal to align the 2 mortgages thereby negating a penalty.

I think you just misunderstood what they were saying. Just to reiterate, you don't have 2 mortgages. You are very unlikely to ever have 2 mortgages from the same lender. All you had is one mortgage, made up of 2 sub-accounts with different products and different terms and different penalties.

Your distinction between whether it was "one mortgage" or "two mortgages" is a false one. What matters is that you should have got the two penalty end dates to align, and you didn't. That's not Co-op Bank's fault.

I really don't understand why you think you can redeem the main mortgage but not redeem the further loan - in other words, why you shouldn't have to incur the penalty on the further loan.