Early Repayment Charge?
2:42 PM, 28th November 2022, 3 years ago
9
Hello, I currently have a 5 year fixed BTL mortgage with Leeds building society at 2.14%. I am looking to sell the property although I am being asked for an early repayment charge of £3k.
Given the base rate is now 3%, and the rate for this same product is close to 6%, I would have thought they would be interested to work with me on this, although this didn’t seem the case when I spoke to them on the phone.
Has anyone any experience of getting out of a fixed rate without paying an early repayment charge due to an increase in interest rates?
Thanks in advance.
Paul
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Holding Fee Refund?
Member Since August 2015 - Comments: 53
4:56 PM, 28th November 2022, About 3 years ago
I think you’re clutching at straws. If your mortgage agreement says there’s an early repayment charge of £3k then they will insist that you pay it, the change in interest rates is irrelevant.
Read your mortgage conditions carefully, you might be able to avoid the early repayment charge by taking out a mortgage with them on another property.
Member Since February 2011 - Comments: 3453 - Articles: 286
9:18 AM, 29th November 2022, About 3 years ago
Hi Paul,
As above ask your lender about ‘Porting’ your existing mortgage product.
Member Since May 2022 - Comments: 108
10:54 AM, 29th November 2022, About 3 years ago
Are you having a laugh? That’s why the early repayment charge. You can’t have it both ways!
But Neil has a good suggestion.
Member Since August 2021 - Comments: 22
2:56 PM, 29th November 2022, About 3 years ago
Was the early redemption fee not mentioned in this stonking good rate 5 year fix, when you signed up?
Member Since October 2013 - Comments: 52
6:46 PM, 29th November 2022, About 3 years ago
Hi Paul
The early repayment charges sometimes reduce as the time goes on. It might be worth checking this as it might mean by leaving your sale for a few months the erc’s may be less. Other than that there is very little chance that you will get away with not paying it! Good luck!
Member Since September 2022 - Comments: 193
8:54 AM, 1st December 2022, About 3 years ago
This is a tax deductible expense when you come to sell your BTL property.
Buying and selling costs come off the profit you make on the BTL before you pay capital gains tax on the difference between what you paid for the property and what you sell at.
Member Since December 2014 - Comments: 16
10:23 AM, 1st December 2022, About 3 years ago
Don’t think its tax deductible as my accountant treated this as fines not expenses for my CGT
Member Since December 2021 - Comments: 161
8:02 AM, 2nd December 2022, About 3 years ago
Reply to the comment left by c Z at 01/12/2022 – 10:23
It’s not a fine, that implies a breach of law. This is a contractual issue so should be claimable.
Member Since August 2013 - Comments: 179
5:19 PM, 3rd December 2022, About 3 years ago
The reason for the early repayment charge is twofold
1) There are upfront costs to the lender such as set-up, legal, surveys etc which are calculated over the lengthg of the fixed rate
2) Lenders borrow this money wholesale themselves i.e. they borrow a certain amount at a fixed rate foir a fixed period. If you pay back early then they still have to pay for that money and can’t necessarily repay it early, depending on the agreememnt with the other lender. They aren’t able to lend it to someone else as it’s usually specific to a certain product.