Early redemption charge?

FiatDino

Hi - we are in EXACTLY this position - even down to the same rate and the same lender (Santander). I can only assume that you - like us - want to get out early because you have a buyer for the property. Otherwise you'd be crazy to pay it off early when you can earn 3x the interest on the capital you unexpectedly now have in your hands!  I simply don't buy those previous comments saying that if they waive the charge for some, they'd legally have to waive it for all … that's just not true as there are hardship cases that they will always consider for penalty-free early redemption given enough 'extenuating circumstances'!

Seems to me that any one who had lent money out at 1.29% would love to claw it back, regardless of what other hedges they had taken out at the time they made the loan. If they get that money back in their hands, they can earn 3x more with it … simple as that.

Having said that, try as I might I haven't yet managed to get to talk to someone outside of the bloody call centre - and until I do, I don't think there's a chance of negotiating this. Anyone got any clues as to how one might speak to a more senior decision maker at Santander? Our mortgage is nearly £600k, so it's a fair whack of interest they're missing out on right now at 1.29%… 

MeteredOut

FiatDino said:

Hi - we are in EXACTLY this position - even down to the same rate and the same lender (Santander). I can only assume that you - like us - want to get out early because you have a buyer for the property. Otherwise you'd be crazy to pay it off early when you can earn 3x the interest on the capital you unexpectedly now have in your hands!  I simply don't buy those previous comments saying that if they waive the charge for some, they'd legally have to waive it for all … that's just not true as there are hardship cases that they will always consider for penalty-free early redemption given enough 'extenuating circumstances'!

Seems to me that any one who had lent money out at 1.29% would love to claw it back, regardless of what other hedges they had taken out at the time they made the loan. If they get that money back in their hands, they can earn 3x more with it … simple as that.

Having said that, try as I might I haven't yet managed to get to talk to someone outside of the bloody call centre - and until I do, I don't think there's a chance of negotiating this. Anyone got any clues as to how one might speak to a more senior decision maker at Santander? Our mortgage is nearly £600k, so it's a fair whack of interest they're missing out on right now at 1.29%… 

The long term borrowing (mortgage) section of the bank are not going to lose money so that the banking (savings) side of the bank can save some money. Think of them as separate businesses with separate management structures with separate targets that drive their end of year bonus.

You'd have to speak to someone who "owns" both of those areas within the bank - probably senior director/board level and somehow convince them to spend time to tell the others that it should happen.

It isn't going to happen. 

Accept you're tied in or pay the ERC. Anything else is a waste of your (and the banks) energy. 

Hoenir

FiatDino said:

Having said that, try as I might I haven't yet managed to get to talk to someone outside of the bloody call centre - and until I do, I don't think there's a chance of negotiating this. Anyone got any clues as to how one might speak to a more senior decision maker at Santander? 

There's no negotiation. The terms are contractual.