Do lender ever waive early repayment charges

Gg1295

Hi all,

We're due to sell up and move abroad. Once all goes through around Oct/Nov time, we're going to be liable for an ERC equivalent to 1% of the borrowing, as our fixed rate deal with Accord doesn't end until Feb24.

Has anyone had a similar experience / knows whether the lender would consider voiding the ERC, given how close we'd be to the end of our deal?

I'll be on the phone to Accord soon - they're just a bit of a nightmare to deal with without a broker!

Thanks for any advice all.

ACG

Its not really a valid reason to waive a charge. 
I think if you were to die some lenders waive it then. You deciding you want to sell up sooner than expected is not really going to cut it. They incur costs when obtaining that money, they are liable for those costs regardless of whether you settle up early or not. 

No harm in trying, but I think you are wasting your time personally. 

grumbler

What's the rate?

If they borrow at, say, 5%, but charge you, say, 2.5% then they must be happy to allow you to repay early. This is, of course, if their stupid computer doesn't say NO.

user1977

grumbler said:

What's the rate?

If they borrow at, say, 5%, but charge you, say, 2.5% then they must be happy to allow you to repay early. This is, of course, if their stupid computer doesn't say NO.

But they're not going to be borrowing at twice the rate they're charging the OP. The lender will in turn have a fixed rate deal with a margin in their favour.

grumbler

user1977 said:

grumbler said:

What's the rate?

If they borrow at, say, 5%, but charge you, say, 2.5% then they must be happy to allow you to repay early. This is, of course, if their stupid computer doesn't say NO.

But they're not going to be borrowing at twice the rate they're charging the OP. The lender will in turn have a fixed rate deal with a margin in their favour.

They are borrowing new money now. They can have the OP's money instead at 2.5%.

amnblog

You have a Contract with them Gg.

If they let you break it at no cost, they will have to break their business model and do the same for thousands of others.

grumbler

amnblog said:

You have a Contract with them Gg.

If they let you break it at no cost, they will have to break their business model

This sounds exactly like "computer says NO". Businesses exist to make money in the first place, not to follow some model.

and do the same for thousands of others.

They can, but they don't have to. Why on earth will they have to do this, say,  if the mortgage rate is higher than their  current borrowing rate?

ACG

grumbler said:

user1977 said:

grumbler said:

What's the rate?

If they borrow at, say, 5%, but charge you, say, 2.5% then they must be happy to allow you to repay early. This is, of course, if their stupid computer doesn't say NO.

But they're not going to be borrowing at twice the rate they're charging the OP. The lender will in turn have a fixed rate deal with a margin in their favour.

They are borrowing new money now. They can have the OP's money instead at 2.5%.

It does not really work like that.
It sounds like the OPs mortgage has one year remaining. How many 1 year fixed rates are there? Lets assume the mortgage balance is £200k, what are the chances of them getting someone who wants a 1 year fixed rate for £200k? 

Its not worth the hassle of trying to figure out the numbers etc. It is easier to just hand it back and incur the costs. 

Someone once described it as you are looking at it from the bottom up - ie you can only see this one mortgage. The lender is looking at it from the top down and they can see hundreds/thousands of mortgages. 

amnblog

grumbler said:

amnblog said:

You have a Contract with them Gg.

If they let you break it at no cost, they will have to break their business model

This sounds exactly like "computer says NO". Businesses exist to make money in the first place, not to follow some model.

and do the same for thousands of others.

They can, but they don't have to. Why on earth will they have to do this, say,  if the mortgage rate is higher than their  current borrowing rate?

..they would have to give the same offer to thousands of others or have the Regulator Fine them a squillion pounds.

fewcloudy

grumbler said:

amnblog said:

You have a Contract with them Gg.

If they let you break it at no cost, they will have to break their business model

This sounds exactly like "computer says NO". Businesses exist to make money in the first place, not to follow some model.

and do the same for thousands of others.

They can, but they don't have to. Why on earth will they have to do this, say,  if the mortgage rate is higher than their  current borrowing rate?

Like em or loath em, I think the banks would say they've got a very successful business model, TYVM.

Anyway I've never heard of someone getting out of an ERC, have you?

Gg1295

Apologies for the very late response all! appreciate the advice. Worth a shot I suppose... will feedback if a positive response but I expect not!