Mortgage ERC

Alimar

Why aren't banks being more lenient with Early repayment charges when you have to sell your house because you lost your job and can't afford the mortgage? I have been on the phone to Natwest most of the day to tell them I'm struggling etc but they won't budge on the £5500 charge 😔

Thrugelmir

You chose the product and were aware of the contractual terms at the outset.  Banks make their money on the lending margin. This is also fixed at the outset. That's how fixed term products work. Not possible to have the benefit without the downside unfortunately. 

ACG

Because they will either incur costs themselves or lose money from the early repayment. Banks have a legal obligation to follow Treating Customers Fairly (TCF) and that means treating people the same. £5,500 to you could be hundreds of thousands to them and that could be many peoples jobs. 

This is why things like MPPI/ASU/Unemployment insurance can be important (even PPI!). But in 9 years, I have lost count of the times people say "I will never be made redundant".

kingstreet

The third party which provides the rate swap has to be compensated by the lender. If you don't pay, other customers will resulting in higher rates for all.

dunstonh

Why aren't banks being more lenient with Early repayment charges when you have to sell your house because you lost your job and can't afford the mortgage?

Why should they?

The alternative is for them to absorb the costs and pass them to others.  So, why should others pay for your charges?

The margins on lending for some time have been very small.  Despite the high figures involved.  So, there isn't really a lot of scope for gifts.