Early mortage repayment costs

tricky1234_2

Hi, new to this so please bare with me but any helpf or advise would be gratefully appreciated. I wondered if anyone had some advise on what rights I have in relation to an old mortagte. Some years back my partner at the time (now wife) had mortage on her own with Northen Rock. Having lived together we decided to sell and move, in the Northern rock material it says that they will do all they can to help remorgate however when it came to asking for more money they could not help dispite adding us adding another income and proving a breakdown of costs to ensure we could afford to borrow, live and payback every month. The existing rate my wife had was very good, therefore as a result of their own issues, there mortage rates went through the roof (think it wnet up to 8% putting of investors and any new business) and effectiley stopped lending, albeit they would proberly argue this. As a result we were forced to pay an the early redemtion costs to get out of our mortage and purchase are next house. Im no penny pincher however, all these years it still annoys me and wondered if anyone when if there is anything I can do about this.

dunstonh

As a result we were forced to pay an the early redemtion costs to get out of our mortage and purchase are next house.

None of that is their fault. You were the ones looking to break the contract you agreed. Not NR.

Im no penny pincher however, all these years it still annoys me and wondered if anyone when if there is anything I can do about this.

ERCs are considered fair and legal and exist with good reason.

Your wife applied for a mortgage with special terms which had a tie in period. Those terms could only be offered if the mortgage when at least the full distance of the special terms. If it was repaid early then the lender suffers penalties. Rather than pass the cost of those penalties onto other borrowers, it puts an ERC on the borrower in question so they suffer the cost if they want to break the contract.

Special terms with tie in periods and penalties to exit early exist in many retail areas and there is nothing wrong with that. You cant have your cake and eat it.

Fatherof2girls

dunstonh wrote: »

None of that is their fault. You were the ones looking to break the contract you agreed. Not NR.



ERCs are considered fair and legal and exist with good reason.

Your wife applied for a mortgage with special terms which had a tie in period. Those terms could only be offered if the mortgage when at least the full distance of the special terms. If it was repaid early then the lender suffers penalties. Rather than pass the cost of those penalties onto other borrowers, it puts an ERC on the borrower in question so they suffer the cost if they want to break the contract.


Special terms with tie in periods and penalties to exit early exist in many retail areas and there is nothing wrong with that. You cant have your cake and eat it.

In fact there are rules around ERCs, which have to be reasonable. You can find these rules on the Fin Ombudsman's web site if you search on "Mortgate Early Redemption Charge complaint" this will help you decide whether you do have grounds to complain.