Unfair early redemption

[Deleted User]

I'm remortgaging from Lloyds as my deal is up in July. My T&C says I can avoid the early charges in the last 3 months but no mention that this does not apply if I move to another lender. 
Lloyds now want to levy the charge; they are calculating the charge on my balance as at a year ago. Surely this is unfair as I've akread paid 9 months interest as well as significant overpayments.
I've raised a complaint about this; I spoke to them recently to ask the earliest date I could leave without charges and wasn't told that I'd be charged the early redemption if I moved lender.

Thrugelmir

A complaint isn't going to change the situation as there's no grounds to uphold it. Your product literature, the terms and conditions you agreed to when entering into the contract will be very clear. Will be at the lenders discretion whether they wish to vary these terms. Allowing you to move to another lender makes no commercial sense at all.  Time your remortgage for the 1st August. 

dunstonh

My T&C says I can avoid the early charges in the last 3 months but no mention that this does not apply if I move to another lender.

What does your T&C say?  

My gut feeling is that the T&C is worded to indicate that product transfers in the 3 months avoid the ERC but there is no mention that redeeming the mortgage in the last 3 months would avoid the ERC.  And that you are perhaps confusing what it is saying.

Lloyds now want to levy the charge; they are calculating the charge on my balance as at a year ago.

What does the T&C say?

I've raised a complaint about this; I spoke to them recently to ask the earliest date I could leave without charges and wasn't told that I'd be charged the early redemption if I moved lender.

So, when the complaints team look at the T&C that you agreed, what will it tell them?
These things all come down to the T&C that you agreed.   That is why the T&C exists.

[Deleted User]

@dunstonh
The t&c I agreed to are vague being the basis of my complaint. It details that the early redemption does not apply in the last 3 months and nothing else. There is no mention of how any charge is calculated.  In my very humble opinion, Lloyds are not following t&c; I've had no notification of amendments etc 

ACG

Have a look at your mortgage offer, I am 99% sure it will detail how much you will be charged as a maximum in ERCs up until your deal finishes. 

In terms of the 3 months prior - does it say you WILL not pay anything if you leave the deal within the last 3 months or you MAY not pay anything in the last 3 months? If it says you will not pay anything, then they need to honour it. If it says may not, then there are conditions to be met and the condition is that you remain with them. If you have called up and discussed it and nobody has explained how it works, that is pretty poor. When I worked for a bank we were always told to explain things as best we can, doing the bare minimum was fine but thats not how you keep customers happy. 

I know that lenders will waive the ERCs within the last 3 months, because I do this every day. I would not expect the average person to know that, but in all honesty, I do not think your complaint will go anywhere beyond a good will gesture - but I could be wrong. 

[Deleted User]

@ACG
Thanks for responding. I'm pretty sure there are no figures in my paperwork but I'll check again. I can wait til August, it's not ideal though.
What do you think of the calculation being done on the balance as at July 2019? The balance then was over £40k, now £26k.

Thrugelmir

Missu said:

I'm pretty sure there are no figures in my paperwork but I'll check again.

Such an omission is somewhat unlikely given that early redemption charges have formed part of contractual terms for many years. 

John_

Missu said:

@dunstonh
The t&c I agreed to are vague being the basis of my complaint. It details that the early redemption does not apply in the last 3 months and nothing else. There is no mention of how any charge is calculated.  In my very humble opinion, Lloyds are not following t&c; I've had no notification of amendments etc 

The terms will not be vague, they will be exact. Why not quote them, rather than paraphrasing, so that people can give better-informed advice?

ACG

Missu said:

@ACG
Thanks for responding. I'm pretty sure there are no figures in my paperwork but I'll check again. I can wait til August, it's not ideal though.
What do you think of the calculation being done on the balance as at July 2019? The balance then was over £40k, now £26k.

Have a look at Section 9 on your Mortgage offer - although it may be different depending on how long you have had your current deal for as the offers changed not too long back. 

It doesnt really matter what anyone thinks. They told you what they would do and you agreed to it. You would be a bit peeved if they extended the tie in period, but you want them to shorten it, I try to look at everything from both sides, it is not a dig, I do think the person on the phone has done the bare minimum from what you have said and if I was their manager (I was a manager when I worked for a bank) if I had picked this up on a call coaching session I would have raised it with them. We used to grade on a scale of 1-10 and I think a 7 was a pass, they probably would have passed and got a 7, but they would not have got anything higher and that would not have helped their bonus. 

Its one of those things where if you have not asked the right questions, you have not got the right answers. But the person on the phone knows mortgages inside out (or at least should do) where as it is not reasonable for you to know everything and part of their job is to understand why you are asking what you are asking.

dunstonh

Missu said:

@ACG
Thanks for responding. I'm pretty sure there are no figures in my paperwork but I'll check again. I can wait til August, it's not ideal though.
What do you think of the calculation being done on the balance as at July 2019? The balance then was over £40k, now £26k.

There are two parts to the agreement.   The T&C will not be personalised.  It will be generic.  The personalised bit is the offer letter/Key features illustration.   You need to read both of those.

You would not expect vague or wishy washy terms in a modern contract.  It is entirely possible but would be very unexpected.

[Deleted User]

Thank you to all that replied. I've checked the paperwork for the deal I am on ( it was a change in rate remortgage with the same lender). The only detail it gives about early redemption is the breakdown of %payable in each year.
If I don't get anywhere with a complaint ( which to be clear is about the misinformation given when I rang for advice) then I will wait until July. 
The other part of my complaint that no-one has commented on yet, is that the lender is using the balance from July 2019 to calculate the early redemption charge. Thoughts please only on this point?  I'm happy with what I'm doing on the timings etc.