Freya wanted to switch mortgage before the end of her fixed-term deal

Mortgages Interest

What happened

Freya had eight months until her fixed-term product was due to end. But, concerned about rising interest rates, she wanted to switch her mortgage sooner. This meant she’d have to pay an early repayment charge.

As she was struggling with the cost of living, Freya asked her mortgage lender to waive the early repayment charge .

Her lender’s policy was to waive the charge for borrowers whose deals only had three months left to run. The lender told Freya she could wait five months. But, if she wanted to switch mortgages immediately, she’d have to pay the early repayment charge.

Freya went ahead with the new interest rate and complained to us that it wasn’t fair she’d had to pay an early repayment charge.  

What we said

We understood Freya wanted to switch to a new interest rate before the end of her fixed-rate product to protect herself against rising interest rates. But the terms of Freya’s mortgage set out clearly there was a charge for ending the deal early.

There are good reasons for early repayment charges. And as the terms and conditions had made it clear there was a charge, we didn’t think it would be reasonable to expect the lender to waive it.