Early redemption fees on nearly 1,500 fixed-rate mortgages are to be waived by lender Bristol & West (B&W) in an attempt to reduce the number of mortgages on its books, according to a report from Telegraph.co.uk.
The former building society, owned by Bank of Ireland, stopped offering new business in January. It has now written to 1,400 borrowers, asking mortgage broker London & Country to take on these customers through its options.
It is not the first lender to try and get borrowers to remortgage elsewhere. Mortgage Express ? a lending arm of Bradford & Bingley ? has offered to waive fees, and GMAC is one bank which has actually offered to pay off part of the loan.
B&W is making the offer to borrowers of various fixed-rate deals of two, three and five years, but they are all due to end in the next 13 months. Rates range between 5 per cent and 6 per cent.
The penalty fees range from 3 per cent on two- and three-year deals to 4 per cent on a five-year deal.
A B&W spokesman said that borrowers were welcome to stay with the lender and, if they did, their rate would revert to the standard variable rate (SVR) (currently 2.99 per cent) when the fixed deal came to an end. With the average SVR at 4.69 per cent, B&W?s is one of the lowest on the market.
Analyst David Black of Defaqto said that borrowers could probably find a lower fixed rate than 5 or 6 per cent if they chose to move, as long as they had enough equity in their property. ?You need to weigh up all the factors, including the rate payable after the fix ends,? he said.
Ray Boulger of mortgage broker John Charcol said: ?As everyone offered this incentive is within 13 months of their Bristol & West deal finishing, by the time they complete any remortgage they will have less than a year remaining on their fixed rate and so the ?revert to? rate is a key consideration.?
