Mortgage ERC

Kwisatz78

Hi

My current mortgage terms with Nationwide has a ERC of %5 regardless of which year I am in in my 5 year mortgage.

A couple of years ago I had an extension built and so my equity went up so I started looking for a cheaper deal.

I phoned my broker who said that even with the lowest cost mortgage on the market it wouldn't make sense to leave my current mortgage as the ERC would be to expensive.

I recently found out that ERC can not be profited from and any charge levied should reflect that which the bank would have to pay when a mortgage is payed off in full.

A friend has advised that he thinks this %5 seems high, and indeed Nationwides new 5 years mortgages scale appropriately down as the term nears the end.

I have spoken to Nationwide who basically said I have signed the mortgage and there is nothing I can do, I have also contacted the ombudsman who are raising the query also.

Has anyone else been through this kind of thing at all? If so any advice?

Thanks in advance

dunstonh

My current mortgage terms with Nationwide has a ERC of %5 regardless of which year I am in in my 5 year mortgage.

That is very unusual. Are you sure about that? With any but their 10 year mortgages, it is usually 1% for each year of tie in left.

Has anyone else been through this kind of thing at all? If so any advice?

It all depends on the contract you agreed. If its in the contract then that is what you pay. There were some small number of successes on complaints many years ago but these were on cases where the ERC was not stated on the contract. The only ones you tend to see at the FOS which result in a success are where porting was refused and an ERC incurred. Some of the older contracts stated that porting was allowed.

http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=43832

I have also contacted the ombudsman who are raising the query also.

The FOS will just forward your complaint to Nationwide and not do anything themselves.

Kwisatz78

Hi there, yes its absolutely correct and a friend in mortgages also though this was unusual which is why I have started the complaint process.

As you say the FOS have forwarded my complaint but once I get a response then I can take it further with the FOS.