The question I have now, is whether anyone has had success during the pandemic of negotiating better terms of exit from early BTL mortgage redemption fees, levied by the lender (Barclays Bank in my case) against paying off a fixed-rate mortgage ahead of the rate review date? I want out, if I can sell the flat before July 31, but currently face about £8k in early mortgage redemption fees.
I have worked for many banks in the product approval dept. I have only seen an ERC waived when the customer is in financial difficulty and needs to sell, has passed away and the estate is being sold or when the property is under repossession by the lender.
The redemption fees are set to hedge the rate you’ve enjoyed for X amount of time. You can try ask them for a reduction but if you have no difficult circumstances I can’t see them waiving the fee. I don’t know of any bank currently that would waive ERCs even if you are remortgaging with them - although some may include the ERC for your old mortgage in with the new mortgage payment (but they you accrue interest on the ERC, not advisable).
I spoke to the bank. Actually they will waive the early redemption fee within a 30 day period of the end of the fixed rate. So there is at least a little flexible window in which to aim for a completion on a sale.
Nice!
I’d check that advice correlates to the product factsheet that came with your mortgage offer. Again, from experience, I wouldn’t trust the initial advice of the call centre (assuming that’s who you spoke to) especially if this wasn’t written within your offer, or you don’t have it in writing in some other communication. If you don’t have your original product factsheet, your lender will have copies that you can probably download from the website.
Banks aren’t famous for being untrustworthy for no reason!
Thanks Caitlin,
In essence, that is definitely a consideration, yes. I’d rather not face a hike of over 100% in the mortgage payments, but I’d rather not have to get a renewed mortgage product as well. Due to an over-riding change in my circumstances, I would prefer to sell this property. I realise there are other options such as porting to a no redemption penalty mortgage, if necessary, or changing lender for a new FRM.
There are defo options for you but the cheapest will be to sell it and complete after July 1st. 60 days before the term expires Barclays will write to you with your options, including what your payment will be on SVR if you “do nothing”.
For reference their SVR is 4.99% which isn’t too bad (there are some at 6.89%!!) but notably, there are other banks which have SVR at around 3.5% - lower than some FTB fixed rates!