Up front ERC being demanded - why?

LauraCav123

Barclays existing customer - moving to fix ahead of end of current rate July 23. Whopping ERC of 13K - but not allowing us to add to the loan and want it up front by next week! Why? Just because they can and have plenty of applications to work through? 

dunstonh

 but not allowing us to add to the loan and want it up front by next week! Why? 

Adding an amount that size is possibly above the amount they allow without it being viewed as a further advance and new lending criteria and application needed.  

Serve_the_Servants

I think this is just a sign that banks are taking a risk averse position in the current climate. If it’s added to the mortgage and you default, it’s just more money they will never see. How big is the mortgage? i.e. what is the exposure to them? Sounds like the balance could be sizeable already if the ERC is that much. 

LauraCav123

Yep large 400K. Think we will probably have to swallow it. Switching to 3.05% 10 yrs

Serve_the_Servants

LauraCav123 said:

Yep large 400K. Think we will probably have to swallow it. Switching to 3.05% 10 yrs

Christ, I feel for you. Are you going to be okay? What’s the rate you’re coming off and the difference in payments? It’s these sort of increases on big balances which can cause a lot of pain. Obviously smaller increases on smaller balances can cause problems for some people too though. So much money being sucked out of the economy and redirected to banks. Really doesn’t bode well when 75% of our economy is comprised of the service sector which relies on people having disposable income.  

dunstonh

 So much money being sucked out of the economy and redirected to banks.

And the banks have to pay the investors that put up the money that is being lent out.

penners324

You remortgaged with 3 years left on the deal?

penners324

The ERC relates to the old mortgage so probably can't be add to the new mortgage under Barclays T&Cs