Surely I am not the only landlord worried about new EPC requirements?9:44 AM, 17th February 2021
About 2 weeks ago 125
Have you discovered your fixed-rate loan has an enormous breakage cost? You may have a Hidden Swap.
‘Hidden Swaps’ are loans sold by banks to customers mainly between 2005 and 2008 and include commercial loans for residential let property. They were disguised as ordinary fixed-rate loans but they were not. Many thousands of cases are coming to light where landlords want to, or have to, break their loans for some reason. Instead of breakage fees of a few percent which might be expected they end up getting charged huge penalty costs as much as 40% of the value of the loan. This is preventing re-financing, selling down, developing, re-investing, or simply downsizing, and in some cases causing financial ruin.
Many landlords are in a corner. Sometimes the bank aggressively down-values the portfolio, the customer discovers they are stuck in the loan, and have to pay extra fees or interest because they are ‘in breach of contract’ (often manufactured deliberately by the bank). Sometimes landlords want to re-finance elsewhere or amend their lending but discover their hands are tied because of completely prohibitive breakage costs.
The reason for all of this is that thousands of people were sold a Swap but they were never told about it. Many people feel this is even worse than the mis-selling of Interest Rate Swap Agreements (IRSAs). At least they knew they had a Swap! To make matters worse, IRSAs are covered by the FCA review and Redress Scheme, but Hidden Swaps are not.
Bully Banks are committed to changing this, and are holding their first Hidden Swaps Conference on 30th November 2013. For further information about joining Bully-Banks, Hidden Swaps and the Conference go www.bully-banks.co.uk.
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