Waiving ERC?

Kt87

Hi I was wondering if anyone had any experience or advice regarding Early Repayment charges.

We bought our property 2 years ago when there was uncertainty regarding interest rates and talk of them rising. We entered into a 5 yr fixed rate at 3.3%. Obviously they all fell just after this! We are now looking to sell our property and take out a higher mortgage. Our lender had said they will prot our current and look at an additional mortgage for the remaining fee (about 15k @ current rates 1.85%)

We would face a £6325 ERC fee if we left our mortgage for a new lender which we can’t afford on top of other fees unless we added to mortgage.

I was wondering whether we would have a case to ask our current lender if we can waive the ERC if we agree to take the remainder with them and extend the term (currently have 19 years left would look at about 22 years for larger mortgage)? I don’t know if it dreamworld but I have read information about the ERC is about the loss of business and interest on property which actually would be minimal if we stuck with them.

Any experience of this? Thanks!

ACG

I dont mean this to sound as blunt as it will, you can ask but they will refuse to.

There is no reason for them to. It is part of the contract, they will also incur costs/lost income for you paying back the loan early. If they do it for you, they have to do it for everyone.

TrickyDicky101

If your lender allows you to port your current rate (and you continue to borrow at least as much on the new property as you are currently) then there may well be no ERCs to pay. Check with your lender.

kingstreet

The loss isn't to your lender, it's to the third party which provided the rate swap to make your fix possible.

You will not get this waived.

Best you can do is port the current rate to avoid the ERC and take the increased borrowing on one of the lender's current products.

fewcloudy

Kt87 wrote: »

Hi I was wondering if anyone had any experience or advice regarding Early Repayment charges.

We bought our property 2 years ago when there was uncertainty regarding interest rates and talk of them rising. We entered into a 5 yr fixed rate at 3.3%. Obviously they all fell just after this! We are now looking to sell our property and take out a higher mortgage. Our lender had said they will prot our current and look at an additional mortgage for the remaining fee (about 15k @ current rates 1.85%)

We would face a £6325 ERC fee if we left our mortgage for a new lender which we can’t afford on top of other fees unless we added to mortgage.

I was wondering whether we would have a case to ask our current lender if we can waive the ERC if we agree to take the remainder with them and extend the term (currently have 19 years left would look at about 22 years for larger mortgage)? I don’t know if it dreamworld but I have read information about the ERC is about the loss of business and interest on property which actually would be minimal if we stuck with them.

Any experience of this? Thanks!

Rising/falling interest rates seems irrelevant here.
Sure, fix if you think they will rise, but don't fix for 5 years and then decide to sell 2 years later, that's disastrous.