Mortgage Fixed deal ending, additional borrowing isnt

danny2680

Hi,

Our fixed rate mortgage deal is coming to and end soon and we'd like to switch to a new deal, maybe even a new lender. The probem is we did some 'additional borrowing' at the start of the year and this is still on a fixed deal. We have told the bank we are happy to pay the penalty to end the fixed deal on the additional borrowing so we can move the whole mortgage to a better rate.

The bank responded by saying we would need to apply for permission to pay the penalty and there's no guarantees we could do it. Effectively holding us to ransom and forcing us to keep our mortgate with them.

This sounds very dodgy to me, possbily illegal?

If anyone can advise on this matter it would be gratefully appreciated.

Thanks

Dan

Foxy-Stoat_3

Assuming you took out a secured loan on your house which increased your LTV %.

I would look at the penalty and possible new rate before deciding.

Doesn't sound dodgy, what does your contract say about ending the second fixed deal?

danny2680

Correct, we've already taken into account the penalty and new rate which is why we want to move 'the whole mortgage' to a better deal.

As far as I'm concerned I should be able to pay off any loan and penaltys early if I chose too!!

The bank has nothing to gain in the long run by forcing us to stay with them. As soon as the fixed deal ends on the additional borrowing we'll be straight off somewhere else!

I'll have to have a look at the terms for the additional borrowing.

Thanks

Dan

JimmyTheWig

Have never heard of needing to get permission to repay your mortgage!

Are you looking at getting a new deal with your existing mortgage provider, or going to a new lender?
What they might mean is that you need "permission" to get a new deal because they might be treating it as a new mortgage. So it might be that you don't need permission to pay off the old deal, but you need permission to take out a new deal, if that makes sense?

Thrugelmir

danny2680 wrote: »

Correct, we've already taken into account the penalty and new rate which is why we want to move 'the whole mortgage' to a better deal.

and your lender doesn't want to play ball as it will cost them money.

Your lender will allow you to pay the ERC and remortgage elsewhere though. Downside is this may cost an additional amount in product fees , valuations fees, legal charges and mortgage redemption fees.

GMS

Who advised you to take additional borrowing which would run beyond the original fixed term?

Could you not have taken the additional on a no penalty product, even if higher rate?

Did you know you were likely to want to refinance so soon?

Which lender is it?

danny2680

Jimmythewig- as far as they're concerned we're only looking to remortgage with them. They definitely said we'd need to apply for permission with head office to pay the penalty for the additional borrowing!

GMS- A three or five year fixed deal were the only two options available at the time so we took the three year, we mentioned at the time to our advisor we would be looking to merge the additional borrowing with the main mortgage when the main mortgage reached the end of it's fixed deal. They never mentioned it might not be possible/that we'd need to apply for permission to do so!!

The lender is Llyods.

I've been trying for over week now to speak to our contact there. I have her direct mobile and direct email. She never answers her mobile and hasn't bothered responding voicemail/email, I'm not suprised to learn Llyods has such a terrible customer service record!!!

opinions4u

There's nothing to stop you remortgaging. Although if you're SVR is 2.50% think carefully before you do.

They may have their own internal rules around what products you can / can't have if you do stay with them.

I think you've confused yourself between staying with a lender and remortgaing to a new lender.

I've been trying for over week now to speak to our contact there. I have her direct mobile and direct email. She never answers her mobile and hasn't bothered responding voicemail/email, I'm not suprised to learn Llyods has such a terrible customer service record!!!

Is she in work? Why not ring a generic mortgage number for existing customers?