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Old 28.09.2020, 19:53
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Re: Early repayment of Libor Mortgage...

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Exactly.

The 1,5% pa compensation comes from the early repayment clause.

My wider points remain:

1). was it reasonable to charge from mid-Aug to end-Dec or should they have capped it at 90 days

2). was it reasonable to charge 1,5% when the interest rate was effectively 1,2%.


When my agreement was struck (2008), the effective interest rate was >3% so the compensation in the event of early repayment was priced at a discount to the effective rate. I have also read elsewhere that banks are not allowed to charge leaving customers negative interest...

Banks do have a propensity to whack exiting customers as it's their last chance to milk them, but I must say that I had a comparatively good experience with the bank with three-letter-name when the time came to withdraw ma savings/the equity from my house sale as they waived their default withdrawal charge as I had been a (relatively!) good paying customer over the preceding 20 years. ;-)
1) yes (and no to the cap as apparently it is in the contract
2) if it is per the contract/early repayment yes.

Why not talk to them and ask them to lower the interest/charge? If you were that good a customer they might be willing to look into it