NatWest/RBS Redemption Guidance

For and on behalf of RBS/NatWest

Sending the correct funds to redeem a mortgage account

We’re seeing an increasing number of cases where funds being sent to redeem mortgage account don’t include the required Early Redemption Charge (ERC).

This is causing additional work for NatWest as well as for solicitors, as we have to request the shortfall amount then track the funds as they come in.

Our redemption statements will always include any ERC due. Although some customers will be taking a new mortgage with us – not all will port their rate, so please check this with them.

Here’s some information to help you identify when the customer is liable for an ERC

Where their full existing mortgage rate is being transferred to a new mortgage account, the following conditions will apply

The ERC can only be deducted from the redemption figure if the repayment of the existing mortgage and completion of the new mortgage take place on the same day.

If both transactions don’t take place on the same day – the early repayment charge must be paid.

If the transactions aren’t completed on the same day but the new mortgage completes within four months of the repayment of the existing mortgage – we’ll refund the ERC.

Where the customer is only partially transferring their existing mortgage rate to new mortgage account, the following conditions will apply

The ERC may only be reduced from the amount quoted on the redemption figure if the repayment of the existing mortgage and completion of the new mortgage take place on the same day.

If both transactions don’t take place on the same day, the ERC must be paid in full.

We’re here to help

If you’d like to confirm the amount of the reduced ERC please contact us on:

NW – 0345 302 0190
RBS – 0345 721 2600
FAUK – 0345 303 0200
UBNI – 0345 300 5079

If the transactions don’t complete on the same day but the new mortgage completes within four months of the repayment of the existing mortgage – we’ll refund the early repayment charge.