Waiving ERC when re-mortgaging?

pledgeX

Would a mortgage company be willing to waive the early repayment charge if you re-mortgage with them?

The ERC on my deal is (~£2500). If I have to pay this, I will be re-mortgaging with someone else as they have lower rates than my current lender (First Direct). If however they were to waive the ERC, then their deal will work out a better value for me, so I’d stay with them.

It’s in the contract, so I can’t imagine they’d just waive it like that, but in this scenario, why wouldn’t they? They’d make a hell of a lot more out of me in interest if I stay with them when compared to the measly 2.5k fee.

I know the obvious answer is to ask them, but they won’t answer via email and I’m not in a position to phone currently.

Kentish_Dave

This tends to referred to as porting your mortgage, and yes, some lenders allow it on some products.

There’s no way to tell from here if yours does.

kingstreet

A remortgage is a new mortgage with a new lender to repay the current one. Chances of ERC being waived - none.

Porting refers to moving house and transferring your mortgage product to a new mortgage with the same lender. ERCs won't apply as you are continuing the terms onto the new mortgage.

If this is a customer retention product - ie a new rate from your existing lender, your chances of the ERC being waived are slim and none!

kingstreet

It's worth noting an ERC reimburses the third-party who provided the rate swap which created your fixed rate. It's not necessarily the lender which will retain this money if you settle your mortgage early so the decision-making process on waiving ERCs is not that straightforward.