Fixed rate exit fees

Jmy

Hello, I am in the tenth year of a ten year fixed rate mortgage at just over 4% part of an 18 year year term mortgage. I have contacted Leeds building society about not having to pay 10% exit fee as I do not intend to purchase another property so I am not transferring to another deal. As they can discuss a new deal in the next few months but refuse to use their discretion with the exit fee on outstanding balance I would prefer to avoid this substantial bill. Clearly the intention behind the fee is to discourage people transferring to cheaper deals. However, my intention was never to sell up having paid over 4% for the last ten years. However, Leeds are keen to talk to me about deals for the remaining 8 years which is ludicrous as they refuse to use their discretion with the exit fee even though I will be exchanging a few months before the ten year fixed rate ends. Any ideas, views or suggestions as I know contractually I am stuck. Thanks Leeds BS.

ACG

Your slating a Mortgage lender for doing what you both agreed to?
I spend half my life arguing with them for doing something different to what was promised.

Thrugelmir

Jmy wrote: »

which is ludicrous as they refuse to use their discretion with the exit fee even though I will be exchanging a few months before the ten year fixed rate ends.

You signed up to these contractual terms. There is no discretion. That's the black and white reality.

amnblog

A 10% exit fee in year 10?

Are you sure?

Jmy

Exactly.....yes contract but still harsh as it is not the intention behind the fee but clearly a money making thin. I am not going to another deal just selling up totally not going elsewhere or chasing better deal😞😡🤔

Jmy

Sorry should say money making thing ....
Businesses like Virgin look at the intention behind 'rules' not jump to ability to make money.
I mean think about it, the charge is to prevent people taking a good deal then flitting to another one and so on. It is not about penalising someone who needs to leave 8 months before the end of ten year. I mean we are not talking a one level general fed, it is 10% of the final outstanding balance!
Thanks

ACG

The charge is there because they have used other peoples money to lend you the money. What happens to grandma smith who put her money in a fixed rate bond for 10 years?

Your now saying either she has to take a hit on the interest she signed up to or the bank has to. Either way someone has to lose out because you changed your plans.

kingstreet

Jmy wrote: »

Sorry should say money making thing ....
Businesses like Virgin look at the intention behind 'rules' not jump to ability to make money.
I mean think about it, the charge is to prevent people taking a good deal then flitting to another one and so on. It is not about penalising someone who needs to leave 8 months before the end of ten year. I mean we are not talking a one level general fed, it is 10% of the final outstanding balance!
Thanks

To fund a fixed rate, the lender's Treasury team has to buy a rate swap for the equivalent period of time. Unfortunately, the swap isn't for nine years, four months nor is the penalty the lender has to pay to the market counterparty if it breaks the agreement early.

The lender is just as accountable to the third party as you are to the lender.

Trying_to_be_good

Can't you port your mortgage to your new property? Carry on for the remaining 8 months of your current deal, then either get a new deal with the same lender or re-mortgage somewhere else?

Thrugelmir

Jmy wrote: »

Sorry should say money making thing ....
Businesses like Virgin look at the intention behind 'rules' not jump to ability to make money.
I mean think about it, the charge is to prevent people taking a good deal then flitting to another one and so on. It is not about penalising someone who needs to leave 8 months before the end of ten year. I mean we are not talking a one level general fed, it is 10% of the final outstanding balance!
Thanks

Can work the other way. Interest rates could have risen. How would you feel if the lender said we want to cancel the fixed rate and charge you the going floating rate? You be livid. Writing to the FOS, the FCA along with your MP.

Contractual terms are put in place in order that the parties concerned have certainty. If either party breaks the contract then the other has a remedy. In effect it's called fairness. Contracts would be pointless if any point in time either party could simply walk away.

Senior_Paper_Monitor

Businesses like Virgin look at the intention behind 'rules' not jump to ability to make money.

Really ?? Have you ever tried to get Virgin money to waive' their T&Cs or criteria ?