Changing Mortgage Mid fixed term

Mr_Incredible

I have a mortgage with Nationwide about half way through its initial fixed term. I believe there is a penalty for early redemption but was wondering if there are any angles/ways to wriggle or do a new deal with them that they might relax this.

I know this may to most sound retorical but just wondered if anyone had any experience of this?

kingstreet

Nope.

You have to pay the early redemption penalty from your own resources (you can't add it to the loan) to enable you to pick one of its other products.

This is a recent change reported by another member the other day. Previously, you could not do it at all, you had to pay the ERP and remortgage to another lender.

Mr_Incredible

So even if I wanted to remortgage with them for a longer fixed term, thats a no?

kingstreet

It's a transfer from one product to another and it sees the ERP payable just as if you remortgaged or repaid the mortgage from a lottery win or inheritance.

Fixed rate funds are based on a rate swap with a market counterparty and they have to be compensated for their loss of interest.

As the lender is paying it away elsewhere, there is no ability to "haggle" over the amount in return for new business.

Mr_Incredible

Ok thanks, sometimes there is a fixed penalty or sometimes it deminishes the closer you get to the end of the FP. I'll just have to wait a little longer then

beckysbobbles1

It's very doubtful that they will waiver any EPC.

I assume you'd want to remortgage at a lower rate so they will lose money there, so why would they want to also lose the ERC?

You should do the calculations to see whether paying the ERC still works out cheaper with a new mortgage rate.

Mr_Incredible

Thanks Becky, you're probably right, but as to your question by tying a new deal up with me now they would guarantee interest profits from me for a number of years as opposed to me going somewhere else at the end of the existing ficed period.

lentrix92

was thinking the same - but the ERP's are a lot!

Mr_Incredible

I went into my local Nationwide, they're looking into it, I'll post the result

Mr_Incredible

So I've spoken to the lender and they have offered me a new fixed rate over 1% cheaper than I am paying now for two years or other 3 and 5 year options, WITH NO EARLY REDEMPTION PENALTY!!!!!!!!!!!!!!!!

kingstreet

Did you get that in writing?