Mortgage Exit fees - bitter pil to swallow

sillysladey

Hello,
Last year I re-mortgaged my home to take my ex partners name off the mortgage. My son is now nearing the age when he applies for secondary school, the school in my area has been rated as 'needing improvement' and I'm keen to get him into the best school possible. I've found a new build home in a nearby village and I really want to proceed, the problem is; my existing mortgage company are going to charge me £2.2k in exit fees because I signed up with them for 2 years (tracker mortgage). They will not offer me what I need to get the new property however I have found a separate provider which will. This is a huge amount of money for anyone to pay out, I was hoping if anyone had any experience with this and if they managed to have the fee's waivered?

Many Thanks

AdrianC

You signed up for a mortgage which charged a fee if you repaid it within two years, in exchange for a better rate on the mortgage.
You now want to repay it within two years.
You are liable for the fee, and contractually obliged to pay it.

hazyjo

I doubt they'll waive the fees. Will they allow you to port the mortgage deal? Are you saying they won't lend you enough to buy the next place? Are you sure it's not going to be a stretch? Is your son even guaranteed a place if you move? I've had friends' kids turned down from their nearest schools, and others I've heard about can see the school from their homes but were still refused as they had a siblings first policy and there happened to be loads one year.


You could try sneaking another couple of thousand out of your asking price, or try knocking it off what you buy.


Jx

kingstreet

That sounds like an early repayment penalty, rather than an exit charge.

As you seem to have established, porting the rate from the old mortgage to a new one with the same lender will see the ERP avoided as you will see out the necessary period on the old rate.

If your existing lender won't lend as much as you need, there's no other option but to go to another lender and pay the required penalty. The lesson here for future readers is where possible, avoid getting tied in to a product which may not apply for the whole period.

I can't see any reason why the current lender should waive any, or all, of the ERP. This compensates the market counterparty which supplied the rate swap so you could have your product.

hazyjo

PS I also asked my mortgage provider this week who quoted my early repayment charge at over a grand (I too may move while in a deal) but said it decreased month by month. That figure you quoted will probably do the same. It'll prob take 3 months to buy the house so bear in mind it will have reduced slightly.


Jx

jbainbridge

When we moved, our existing mortgage would not cover the new house. First Direct ported / reset our original mortgage and we also took out a new additional mortgage to cover the extra cost. What I'm trying to say is - you don't necessarily need the purchase to be covered by 1 mortgage. Would your lender allow you to port the existing deal and take out another mortgage too?

G_M

You chose an advantageous mortgage product with cheaper/better terms than the lender's standard variable mortgage product.

In return for this advantageous rate, you agreed to stay with them for 2 years, or pay a penalty for leaving early.

It may be a bitter pil (sic), but swallow it you must!

sillysladey

Thanks all, I'm not too familiar with porting a mortgage, but certainly something we will look into. any school in the area is better than the one he is currently faced with, obviously no money in the world would be too much for him to have the best education I can get for him, but haggling/ducking and diving is what gets us through the rough times! thank you all for your comments.

swishy87

As others have said, sounds like an early penalty. I know it isn't ideal, but you will need to pay it to move your mortgage. We are having to pay £5,800 to get out of ours as we never envisaged moving in the 5 years since opting for our last mortgage deal. Three years in we decided to move. Silly of us but that's life.

Guest101

sillysladey wrote: »

Hello,
Last year I re-mortgaged my home to take my ex partners name off the mortgage. My son is now nearing the age when he applies for secondary school, the school in my area has been rated as 'needing improvement' and I'm keen to get him into the best school possible. I've found a new build home in a nearby village and I really want to proceed, the problem is; my existing mortgage company are going to charge me £2.2k in exit fees because I signed up with them for 2 years (tracker mortgage). They will not offer me what I need to get the new property however I have found a separate provider which will. This is a huge amount of money for anyone to pay out, I was hoping if anyone had any experience with this and if they managed to have the fee's waivered?

Many Thanks

I fail to see what relevance your sons educational needs have to a contract you signed less than 12 months ago.


On the bright side it may take more than 12 months to sell and that way the fee will be nullified.

AnotherJoe

sillysladey wrote: »

, the problem is; my existing mortgage company are going to charge me £2.2k in exit fees because I signed up with them for 2 years (tracker mortgage).

Do you often attempt to unilaterally break agreements you've freely entered into ?
Would you fancy it there was a letter from the lender tomorrow stating " we've decided that due to the economic situation we are raising our rates by 1%. We know that wasn't in the contract but we need the money to pay our employees so they can send their kids to good schools".