Northern Rock - Waive early redemption penalties?

philnet

Hi Moneysavers,
I'm just writing to see if anyone else has any experience with Northern Rock and early redemption penalties. I'm, currently 2 years into a 5 year fixed rate mortgage with them and I've decided to look at re mortgaging (in order to get onto a lower monthly repayment).
I've had a formal offer from another lender which I want to take up but Northern Rock are insisting on a 5 thousand pound redemption penalty which will effectively make my settlement more than I originally borrowed.
I've phoned Northern Rock and spoken to an advisor as I wanted so see if there was any room for negotiation, the advisor told me that no variation from the signed contract was possible as it was a legally binding document so unfortunately their hands were tied in enforcing this fee.
I explained to them that I was offering to repay the mortgage in full and in the current circumstances that must be something that they would be interested in but unfortunately not, the advisor was adamant that the exit penalty stands.
I was just wondering if any other users had any experience with early exits from NR mortgages and if any penalties were applied.
Hope that made sense!
Phil

homer_j_3

You will not get out of the early repayment charges as they are a condition of the loan and because NR will have priced the deal over 5 years, they are unlikely to break even at this stage either.

You have to accept this unfortunately.

Paul_Biddle

I called Northern Rock (NRAS) a week ago asking about the early repayment charge and was told that the decision had been made to scrap this. I would have had to pay something in the region of £3000 but I was informed that this no longer applies. If I repay the whole mortgage now, the only charge would be the discharge of mortgage fee of £250.

Thrugelmir

Paul_Biddle wrote: »

I called Northern Rock (NRAS) a week ago asking about the early repayment charge and was told that the decision had been made to scrap this.

NRAM now operates differently to Northern Rock. The 2 are distinct seperate entities.

Thrugelmir

philnet wrote: »

I'm, currently 2 years into a 5 year fixed rate mortgage with them and I've decided to look at re mortgaging (in order to get onto a lower monthly repayment).

Precisely why ERC's are applied. At the time you fixed your mortgage 2 years ago it was a good rate.

NR would have borrowed fixed rate money for 5 years to fund your mortgage and back to back the loan. So like you is locked in for the duration.

So either you'll need to pay the ERC or sit it out.