I have been told I have to pay about £16k redemption (6%), am I right in thinking after the sale a can claim it back?

 

In my case I started haggling BEFORE the sale & the charges were waived in full before completion. However, I was in a 6-year deal and even nearer to the end than you. Generally speaking the banks do face some loss if you terminate early on a fixed rate or low start deal so I very much doubt you'd be entitled to the full £16k back - but even the most simple maths tells you theyre better off after 22 months then if youd terminated in month 1 - so to charge you the same redemption fee irregardless of time passed implies its a penalty rather than a genuine pre-estimate of their loss.

Most lenders now taper the redemption so that the longer you've paid the lower the % applied. If you were tied in for 36 months the £16k = £444 per month & youve redeemed 14 months early so 14 x £444 = £6,222 or around 2%. That would seem a fairer figure.

If I were you Id start the ball rolling now by writing & stating that the £16k constitutes a Penalty under the Unfair Terms in Consumer Contracts legislation & offering to settle at the £6,222. Advise them that if they dont accept then you'll be seeking redress through the Courts.

You can still claim in the County Court - but go for the full £16k. If they defend (and they will!) you can then make a Part 36 Offer to settle at circa £10k (ie £16k less £6,222) If they refuse and the judge subsequently rules in your favour for £10k or more then Im pretty sure the other side becomes liable for your costs as well as their own - but please note Im not a lawyer so Id strongly recommend you engage a solicitor to issue proceedings and have this strategy in mind from the start.

Good Luck!

are we saying that the banks / societys cant charge tese amounts what so ever because this isnt what it cost them.

Hi darren

Basically the UTCC regulations say " a requirement to pay more in compensation for breach [of contract] than a reasonable pre-estimate of the loss to the supplier is one form of excessive penalty. Such requirements will, in any case, normally be void as a penalty under English common law".

It goes on to say "an unfair penalty can apply to any term which requires excessive payment in the event of early termination"

Julie

Did you get them cancelled before you paid off the mortgage or afterwards? could you give us some more information.

Before. I was moving house & initially offered to keep my (about to double) mortgage with them if they waived the redemption fee - but they werent having it so I arranged a mortgage elsewhere & battled it out with them.

In my case I was in the final year of a 6-year deal & the redemption fee was more than the remaining repayments!

Quoted the Unfair Terms in Consumer Contracts regulations, worked out what I considered their actual loss to be, and after a few letters they eventually waived the lot - even though Id offered to pay what I thought was reasonable.

Maybe I just got in early, but at the same time I managed to get RBS to refund all of the fees on my boyfriend's bank a/c caused by "timing differences" on between his mortgage & his current a/c (both with RBS!). Either I was lucky - or I really am as scary as people tell me!

Currently going to court with MyTravel over their belief that its OK to chop a day off my holiday & then charge me 50% if I want to cancel as a result!

Keep on Fighting!

Julie

I feel a bit of an "old hat" as I managed to get my mortgage redemption fees (6%) cancelled way back in 2001 !! It took me 5 weeks and 3 letters, but I got there!

Good luck to anyone else who tries it - it can be done!