Mortgage redemtion fees

Ruthanlolly

I had a 2 year deal with Nationwide and during it had to move house. When I bought the new property I took out another mortgage (for more) with Nationwide but they charged me £1000 to get out of the old deal
Should I have been charged this even though they did not lose any business. In actual fact they gained more! If anything I would have thought admin fees at the most.


Its a lot of money and with the house move it's something I really don't need.

ACG

Did you port your existing mortgage over and take out a further advance for the extra or did you switch to a new mortgage completely?

If the former, then you should not have paid the ERC, if the latter then you should. If porting was not brought up at the time of applying for the new mortgage then there may be grounds to make a complaint, although hit and miss as to whether they would give you anything.

kingstreet

ERCs are charged to compensate the third party which provided the swap to make the fixed rate possible. Don't assume Nationwide is gaining this money. It is probably charging you to repay the swap provider.

As ACG asked, didn't you port the rate from your existing mortgage to avoid the ERC? Was the sale of the previous property and the purchase of the current one concurrent, or was there a gap?