Halifax demanding ERP charge even though we have now moved

Chrishartjones

Please help!

We recently moved house. Our previous mortgage was with the Halifax and we had a two year fixed rate mortgage. Paying off our mortgage early (when we sold) would have meant paying a £6,000 ERP fee or we could take a new mortgage with the Halifax and they would waive the ERP charge. This is what we did.

Now... a few weeks after we have sold our old property and moved into our new home, the Halifax have contacted us to say the ERP charge is still outstanding as the new mortgage product we have taken out with the Halifax is a different interest rate than our previous mortgage product.

They are now refusing to remove the charge from the land registry until it is paid which means our buyers cannot be registered in our old property.

Can they do this? If so, why wasn’t this fee included in the completion statement when we closed the mortgage? Our solicitor requested for the ERP fee to be removed (as we were taking a new mortgage with them) which it was - so I cannot see why they can now request it again.

[Deleted User]

If it hasn't been paid, you still owe it.

If you believe you have already paid it, confirm this with them.

Chrishartjones

I haven’t paid it because it wasn’t due. It had been waived as I was taking a new mortgage with them.

haras_nosirrah

When you are porting a mortgage you take the old product to the new property and this is what avoids the erp

If you have taken a new product with the same lender the erp is still due

Did you do this via a broker?

Chrishartjones

Yes this was through a broker. He assured us that the fee would be waived if we took a new mortgage with the Halifax. At no point we’re we made aware that the interest rate had to remain the same for the two products, for the ERP charge not to apply.

Before completing the sale of our old property the Halifax provided my solicitor with a mortgage completion statement which had the ERP charge waived. We completed, cleared the balance and started our new mortgage.

Now, they are saying the mortgage product interest rate is different to our previous one and the ERP charge still applies.

Broadyx

the ERC is only not payable if you take the rate with you - if you have taken a new rate and fully closed down the mortgage then it is payable.

if the repayment of the old mortgage happened before you bought your new one, then you would have been required to pay the ERC and then get it refunded when your new mortgage started.

the only time it wouldn't be payable is if the completion of the new mortgage and the closure of the old mortgage happened at the same time and you ported your rate to the new mortgage.

if this was done through a broker I would suggest going back to them. The only reason the solicitor should have asked for a redemption statement without the ERC on is if both happened at the same time as above and the rate moved with you!

https://www.halifax.co.uk/mortgages/mortgage-information/porting/

how much is your ERC?

haras_nosirrah

from the online broker guidance

If a product is portable this is outlined in the original mortgage offer and supporting documentation.

To port a product the new mortgage application must complete simultaneously with redemption of the current mortgage.

You cannot port a product onto an application for a remortgage from another lender. Porting is allowed on to an application for capital raising on a unencumbered property the customer already owns.

Where Halifax Standard Variable Rate is the reversionary rate which applies to the product being ported, it will continue to be the reversionary rate for the amount of the new mortgage which is on the ported product.

Any extra amount borrowed on the new mortgage must be on a product from the current range and applicable scheme. The reversionary rate which applies to that product and the amount on it will be Halifax Homeowner Variable Rate.

Where a customer sells their property and repays their existing mortgage before they complete on a new purchase, they will incur any Early Repayment Charges that apply. However, if they apply for a new mortgage with us within three months of repaying their existing mortgage, while they cannot port and would choose a new product from the current range at that time, once the new mortgage has started they will receive a refund of the Early Repayment Charge. This is a concession and it may not always be available.

Buy to Let mortgage products cannot be ported

haras_nosirrah

from reading the above it looks as though if the first property completed before the other one (i.e. non simultaneous completion) then they may allow you to get the erc back as long as you take out a new mortgage within 3 months. This is a concession and not guaranteed

If the completion happened on the same day you would have needed to take your existing product with you.

Did you have a break between moving out of your old house and into the new?

Chrishartjones

The erc charge is £6,100. This is why we decided we had no option but to take a new mortgage with the Halifax - to avoid this fee.

Chrishartjones

We completed the sale or our old property and the purchase of our new one on the same day.

The only thing that might be complicating matters is we took a ‘help to buy’ loan in addition to our mortgage. Which is why we couldn’t port our exitising mortgage product to our new loan.

haras_nosirrah

If you had a non simultaneous completion (so different completion days) and retook out a mortgage within 3 months I think you should argue for the refund of the erc

If you completed on the same day and took out a different product then I don't think you will get anything back from halifax