milly123

Hope this can help someone,

We have just negotiated with the bank, commonwealth, and we got out of paying the break cost fee's.

We moved house and ported the mortgage to the new property, as the new property was cheeper than my last one, we had an amount still outstanding, of which the bank would not take back, unless we paid an early repayment fee of $9000, So i asked them what they proposed we do with the money outstanding, There only answer was to leave it in a Term deposit account for the remanding 19mths, which earned interest that did not cover its repayments, and we would also be taxed on.
We made such a fuss that the state manager ended up involved,
We explained that we were being held Hostage to the bank, of which the bank was knowing that they were creating a tax bill for us, Leaving us no option but to take the matter further,
They said there was nothing they could do , we stood our ground and walked out, with us saying we will see you in court.
1 Hr later a phone call, saying that they would take the moneys back with no fee involved.

Good luck to all other's Make a fuss and ask to take it higher.

Hutch

Prior to the GFC some banks were so keen on getting your mortgage that they agreed to pick up the cost of any early break fees. We had a mortgage broker round about six months ago who offered just such a deal.

ABCDiamond

A number of those have looked at this market, but three things would tend to put them off:

• the much smaller market, population only about 33% of the UK
• the much higher transport costs involved
• the higher wages they need to pay (see below)

sj oldfield

Would so many people be trying to get out of a fixed rate if the rates had increased....................NO, they wouldnt.
When you enter into a contract time a fixed rate you should be prepared to take the rough with the smooth.
Interest Rates were rising, loads locked in with a fixed rate, now they are all spitting their dummies cos they want out.

We have a fixed rate of 8.99%, thats our tough sh*t!!

Rant Over

ABCDiamond

Some of them would, when they come to sell the house. But then if rates had gone up, there would be no excessive break fees, just the normal fee of about $2,500.

One of the recent problems is that many lenders did not explain what might happen.

When we changed out investment mortgage recently, the lender advised us to go for a fixed rate, for 5 years, even though he knew we were planning on selling the property as soon as prices begin to rise again, (the property is in Sydney and prices have been stagnant since 2003!)

He actually told us that if we sold early, all we would pay was the $2,500 exit costs.
He (the bank lender) assumed that interest rates would only rise, and he did not consider what might happen if rates dropped.

I heard in the news that K Rudd is going to look into doing someting for people who did get caught like that.
However, proving it is another thing, as most contracts cover the lender, no matter what is said verbally.

wmoore

Very true. No matter how much you want to sympathise with people who have fixed rate loans now the rates have dropped, the bottom line is they would be rubbing their hands together and being smug had they fixed a rate which then increased dramatically - I know because I've seen both sides of that particular coin in the 90's.