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Can you negotiate or claim back early redemptions penalty fees on mortgages

Last post Thu, Apr 08 2010, 12:31 PM by conmankiller. 2 replies.
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  •  Thu, Apr 08 2010, 12:31 PM

    Re: Can you negotiate or claim back early redemptions penalty fees on mortgages

    I concur - There haven't been any FOS or legal cases or any FSA guidance, which have said that in general ERCs are unlawful, they are not penalties for breach of contract.

    They are agreed charges in the event that a borrower chooses to redeem their mortgage during the specified ERC term which is a right the borrower has to exercise if they choose to.

    Just because an ERC is a lot of money doesn't make it unlawful or unenforceable. As long as the ERC was clearly stated up front in your mortgage offer, KFI or similar document, it is legally binding and you have to pay it.

    The FOS will not support an argument that it's too much and you don't want to pay it.

    • Post Points: 5
  •  Thu, Apr 08 2010, 12:20 PM

    Re: Can you negotiate or claim back early redemptions penalty fees on mortgages

    Hi Buster

    Sorry to be the bearer of bad news, but it's unlikely that you will be able to negotiate or claim back these fees. Are you buying a new property? If so, you may be able to port the mortgage to the new property.

    • Post Points: 5
  •  Wed, Apr 07 2010, 10:11 PM

    Can you negotiate or claim back early redemptions penalty fees on mortgages

    HELP!!! PLEASE!!! we are currently selling our and have a mortgage with northern rock which started 6 years ago, after 4 years we signed up for another 5 year fixed rate mortgage with them which we are currently 2 years in on the agreement. if we settled the mortgage owed we will incur a £9000 early redemption penalty fee!! ouch!! is there any way to negotiate on this fee or even better are there any companies out there that will take on a "no win no fee" case to claim the redemption fee back? or can you go to the financial onbudsman for advice to claim back to penalty is this possibility?
    • Post Points: 35