Northern Rock (Virgin) - Early Redemption Fee and Porting Queries

Tunstallstoven

Hi all

I currently have a NR/Virgin mortgage. It's a 10 year fixed and runs out in September 2019. It has unlimited overpayments and as such we should be in a position where we can pretty much clear the mortgage fully by the summer.

The mortgage has an early redemption fee (ERF) of £1,950 and we want to avoid paying that at all costs! The plan is to leave a small amount of just a few hundred £s or so on the mortgage until it ends. That's always been the plan, but we have recently been considering the idea of moving in a couple of years, and if we were to do that our options are unclear to us.

How much control would Virgin have in whether we could port the mortgage or not? Are they allowed to flatly refuse and insist that we clear the mortgage before moving (and thus pay the ERF).

Is there any kind of threshold of money left on the mortgage which would make a difference to their decision? We're happy to leave some on if so (although not too much as we don't want to pay too much in interest).

Is there anything else we need to consider?

Many thanks

Max

Thrugelmir

Seagull27 wrote: »

How much control would Virgin have in whether we could port the mortgage or not?

Total. As porting is not a right but at the discretion of the lender. To obtain a new mortgage a full application will have to be made. Your application will need to meet the lenders current criteria.

Tunstallstoven

Many thanks for the response.

We won't be looking to get a new mortgage I wouldn't imagine.

So from what you say, it would be totally down to the lender's discretion and there's every chance that - regardless of how much is left on the mortgage - if we decide to move before the end of the term (Sept 2019) we would have to pay the Early Redemption Fee and clear the mortgage.

If that's the case, in people's experience, how likely is it that the lender would do this?

Cheers

Thrugelmir

we would have to pay the Early Redemption Fee

A certainty. Fees are imposed for good reason.

Tunstallstoven

Thrugelmir wrote: »

A certainty. Fees are imposed for good reason.

For sure, I appreciate that. But I guess my uncertainty hinges on the likelihood of them letting us move and porting the mortgage. Or in contrast them telling us that they will not port the mortgage and that it must therefore be cleared before moving.

Cheers

Tunstallstoven

Lazy Sunday afternoon bump. Has anyone out there ever been in this situation and if so what happened to you?

Cheers

amnblog

I cannot see them letting you port a mortgage with nominal balance on it.

One of the problems with 10 year products.

The world turns, your life changes.

Tunstallstoven

Thanks for the reply amnblog...

What would you class as nominal? At what kind of figure do you imagine they would consider porting?

Cheers

amnblog

Not a question I can answer Seagull. I suspect, however, from what you have said, you will end up paying the penalty.

Thrugelmir

Is your mortgage interest only?

With regards to what constitutes a nominal balance. Would it worth it to the lender to offer you a port. Given the cost to the lender of doing so.

Tunstallstoven

No, it's a standard repayment mortgage with unlimited overpayments.

It's hard to answer the question as I have no idea what a port would cost the lender. A good question though. And one which is no doubt relevant to my question of "how much should I leave on the mortgage to make it likely for the lender to agree to porting".

Cheers