Mortgage early repayment fees when switching mortgage.

hirsty84

I switched my mortgage back in 2008 from fixed rate to standard variable and have not changed it since. Looking back at paperwork recently i have found out that i was charged £5,000 as a early repayment fee. How can this be possible? it was with halifax, i am still with halifax. I was told it would only cost £2,000 to change and never signed anything, surely i am due some money back from this?? does anyone know about this, or had this happen to them? Help would be much appreiciated.

dunstonh

Looking back at paperwork recently i have found out that i was charged £5,000 as a early repayment fee. How can this be possible?

Very possible. Indeed, quite the norm.

I was told it would only cost £2,000 to change and never signed anything, surely i am due some money back from this?

Your contact sets up the terms of the early repayment charge for the deal you originally had. Does that indicate you have no paid the correct amount?

hirsty84

Everything halifax are saying just isn't adding up, i dont know where this figure has come from, i never signed anything like i said before, nothing is adding up with the mortgage either, i have the property almost 5 years and i still owe more than i borrowed, again that can't be right, can it? thanks for help and comments, i see that your a finicial advisor any help with this is great.

dunstonh

i have the property almost 5 years and i still owe more than i borrowed, again that can't be right, can it?

You barely pay anything back in the early years and if you suffered a £5000 ERC then it is quite possible that you owe more. That is why it is rarely recommended that you change deals mid term.

i dont know where this figure has come from

look at your mortgage contract. It will be documented under the charges for early repayment.

When you buy a deal, you are tied in for the period of the deal. If you choose to break the contract early (such as moving to a different deal) then you suffer an early repayment charge. So, there should be a charge. That bit is ok. The amount should be indicated on the contract. It is typically shown as a percentage and may reduce over the term of the deal.