HSBC Early Redemption Penalties - help!

ladybird179

We are partway through a 2 year fixed rate term with HSBC and have decided to move house.
Our house move requires a bigger mortgage. We initially went to HSBC to see if they could increase our current mortgage or port over to the new house. However HSBC's lending criteria won't even get us anywhere near the figure we require, nearly 80k less than Natwest, Nationwide and Santander will offer us. So the only way for us to get the higher mortgage is to go with someone else and pay the early redemption penalty at HSBC which is £2,500!! HSBC are not being competitive with their mortgage offering and seem like they don't care / need to because they are guaranteed this big penalty payout.

Is it fair that they charge this fee when they are not being competitive with the rest of the mortgage providers?

Thrugelmir

ladybird179 wrote: »

Is it fair that they charge this fee when they are not being competitive with the rest of the mortgage providers?

The fee is contractual as forms part of the product you applied for. So you've no grounds for complaint regarding this. The ERC is charged for business reasons not as a penalty to the borrower.

Different lenders target different markets. Not the lenders fault that you don't meet their current lending criteria.

If you wish to move you'll have to bite the bullet and pay up.

ACG

As above. Sorry to be blunt but the option is to pay or wait until its up before you move.

safestored4

All HSBC appear to be asking is that you to abide by the terms and conditions of the contract that you willingly agreed to when you took out the mortgage. Why do you object to this?

Whether or not their present mortgage offer is competitive is irrelevant.

Lu_Lu

Yep, it's 'not fair' but that's what you signed up for. Consider yourself lucky. We are in the same boat and when we move we will be paying them almost £5K in ERCs!

But we are getting our dream house instead :-)

dunstonh

So the only way for us to get the higher mortgage is to go with someone else and pay the early redemption penalty at HSBC which is £2,500!!

Why the exclamation marks? If you buy a product on discounted terms and then try to cancel the contract before the tie in period then there will be a penalty. You knew this when you bought the product.

HSBC are not being competitive with their mortgage offering and seem like they don't care / need to because they are guaranteed this big penalty payout.

Do not mistake HSBC lending criteria with your decision to break the contract. Its not HSBC trying to break the contract.

Is it fair that they charge this fee when they are not being competitive with the rest of the mortgage providers?

Absolutely fair. You cannot have your cake and eat it. You wanted the deal, you got the deal. Now you want out of the deal at no cost. If you are not going to pick up the bill then who should? You surely are not saying that other HSBC customers should pick up the bill for you?

amnblog

HSBC offer rock bottom rates and these are accompanied with tight lending criteria.


You have been advantaged by one aspect and are now feeling the 'rough side'.
Ppresumably there is a good reason why you wish to sell and move so soon and that reason should outweigh the £2,500 fee you will incur.