ERCs- Early Repayment Charges - early exit fees. (merged).

schoon

Can anyone help with abbey/santander?
I bought myself out of a 5 year fix (fixed just before rates tumbled at 5.8%). It cost me £7500 (the loan is around £160K). Anyone know if I can reclaim any of this? Not only is the penalty huge, but I have been paying well over the market rate for 3 years!
Any help is much appreciated.

_Andy_

schoon wrote: »

Can anyone help with abbey/santander?
I bought myself out of a 5 year fix (fixed just before rates tumbled at 5.8%). It cost me £7500 (the loan is around £160K). Anyone know if I can reclaim any of this? Not only is the penalty huge, but I have been paying well over the market rate for 3 years!
Any help is much appreciated.

you can not 'reclaim' any of it.

GMS

schoon wrote: »

Can anyone help with abbey/santander?
I bought myself out of a 5 year fix (fixed just before rates tumbled at 5.8%). It cost me £7500 (the loan is around £160K). Anyone know if I can reclaim any of this? Not only is the penalty huge, but I have been paying well over the market rate for 3 years!
Any help is much appreciated.

Are you saving sufficient per month to justify the fee?

You cannot reclaim anything. You signed up to a deal which suited you at the time. If rates had gone up to 12% would you have offered to pay extra to Abbey/Santander as you would be paying way below market rate?

Thought not.

MarkyMarkD

picardygirl wrote: »

I've looked on the Offer of Loan, and all it says is "the maximum charge you could pay is xxxxx" which is 4% of the original loan plus a £700 help with costs fee, which has now expired, which is another issue now, as far as i can remember this £700 was to be reduced off my mortgage, but NR are now telling me it was paid into my bank account and quoted which bank account yet my bank have no record of this being paid into my account in the relevant 4-6 weeks after the supposed transaction, so NR are dealing with that one at the moment.

Back to my ERC, in my conditions of mortgage offer, it doesnt state any specific like ERC is payable on original loan, just says ....... "and any early repayment charge referred to in the Offer". Surely, i should have in writing somewhere that the ERC is payable on the original loan.

I'm not trying to get out of trying to pay ERC, as i was fully aware of what we signed up to, but if we do end up moving our mortgage, i obviously only want to pay what i should, no more, no less, and especially after this £700 help with costs supposedly been paid back to me, i have very wary of what NR are actually telling me.

Hi Picardygirl

Are you seriously saying that you didn't notice at the time you were moving house/remortgaging that they failed to pay you £700 that was due? That does seem rather unbelievable to be honest!

dunstonh

bagseby112 wrote: »

I'd like to set out some points which I hope will help people asking about ERCs, whether they are lawful, why they are charged, and how they can be avoided.

Yes they are lawful. The concept of tie ins with early penalty is allowed under UK law and is used in many business areas (Sky, mobile phones, broadband etc)

They are charged because the lender arranges finance or pays for insurance or utilises insurance (or a range of other things) to allow them to offer the deals at that rate. If they have borrowed the money themselves, for example, they still have to pay if you wish to end it early or pay a penalty themselves if they want to terminate early. So, the penalty is there to cover their costs if you choose to break the contract.

They can be avoided by not going into a deal with tie in if you dont think you are going to be keeping the mortgage that long.

_Andy_

Dunstonh - the post above you is a spammer/SEO (see their other meaningless posts).

picardygirl

MarkyMarkD wrote: »

Hi Picardygirl

Are you seriously saying that you didn't notice at the time you were moving house/remortgaging that they failed to pay you £700 that was due? That does seem rather unbelievable to be honest!

MarkyMarkD yes i am! Absolute madness and crazy as it may sound, and i cant personally believe it myself, as I'm not the type of person to let £700 go astray, and i'm sure NR are going to come back and say yep it was paid on such and such date etc etc, but at the moment, they've told me give them up to 48 hours to come back to me, that was last tuesday, and still they are saying its been assigned to someone but this person still hasnt come back to me.

kb070857

Perhaps the Cash Back £700 was paid to your Solicitors and therefore will appear within the your Solicitors disbursements invoice of information breakdown receipts/costs.

I look forward to your comments

I am an Independent Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

MarkyMarkD

Good point, kb.

Given that it's supposed to be "help with costs" the logical place to pay it would be to the solicitors with the completion amount. Not sure why they would pay it by cheque to be honest?

picardygirl

No, couldnt have been paid to the solicitors as it wasnt at the actual time we moved house ..... when we moved we ported our current mortgage over and then changed deals 4 months later, which was when the £700 cashback applied ..... NR "confirmed" to me over the phone last week that it was paid into my bank account within 14 days after our new mortgage completed ...... and could not have been reduced off the balance of my mortgage, was wondering if I may have suggested that at the time.

No excuses at all for me not remember and its shameful i know, busy working mum of two I cant (even though i'm supposed to) remember something from four years ago.

Back on the phone to NR i think .....