Mortgage Part Porting Fee

jadcock

Hi there!

Back in the summer I completed on a new property purchase seeling my old property and buying a new one. Since I was 2 years into a fixed deal and the lender wanted me to pay a fee of circa £10K to close the original mortgage, I decided to port the mortgage. Plus as I was buying a slightly cheaper property I decided to reduce the mortgage by approx £40k. I had numerous communications with the lender including a 4 hour meeting with the advisor during the process which was way ove rteh top. I have also been a good customer and never missed or been later on a payment.

Eventually after a lot of hassle the lender agreed to new mortgage and after a lot of stress we exchanged in teh early summer. About 6 weeks later my solicitor called me and told me that the lender hadnt closed the orignal mortgage and that there was something outtatnding for the owners of my new house. This was because the lender claimed that I owed them an Early repayment fee on the mortgage. I was livid and after talking to the lender they told me that I owed them a few £1000 as a part port fee as I had only ported a proportion of the mortgage.

At this point I had hit the roof and I basically complained to the lender. The grounds being that they had never told me that a part port fee would apply even after the consultation with the mortgage advisor and numerous other contacts with the advisor and me telling the guy that I planned to reduce the mortgage - he even agreed that that was a good idea! After some to-ing and fro-ing they are still investigation this and will come back to me I am told soon, They have also implied that it was my solicitors fault for not requesting a proper statement from the lender - I disuputed that as the problem was before that and thus far have stuck to my guns and said that I was never informed properly about this fee, as if I had known then I would have considered my options - either not to reduce the mortgage or reduce it by less than £40k. They also suggested that there was a line in the mortgage offer suggesting that fees may apply for part porting, however these were never explained to me in any detail and no one beforehand told me that this was the case or what the figure would be.

I am currently waiting for their final decision. If its not in my favour I will take it up with the FCA!

Any one out there facing a similar issue or can advise.

Many thanks
Murphy

kingstreet

A proportionate penalty should be payable on any reduction in the current mortgage amount between the current property and the mortgage amount for the new one.

The FCA is not interested in consumer complaints. Exhaust the lender complaints procedure before escalating to the FOS (Financial Ombudsman Service.)

RADDERS

They are correct that the solicitor should have requested a formal redemption statement, this would have then identified how much was owed to redeem the account. When porting a product if it is less than the original loan amount then yes there would be a pro rate ERC to be paid. For example if you had borrowed £200,000 with a 5% charge that would equate to £10,000 but if you only borrow £160,000 on your new mortgage then there would be £2,000 ERC to be paid. This is normal for fixed rate products as banks and building societies purchase swaps to hedge against interest rate rises when pricing products. Hope that explains it a little better Radders