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  • FIRST POST
    • tesla2017
    • By tesla2017 7th Oct 17, 8:30 AM
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    tesla2017
    Redemption Fees, oh really?
    • #1
    • 7th Oct 17, 8:30 AM
    Redemption Fees, oh really? 7th Oct 17 at 8:30 AM
    Appreciating that there is a cost to the lender in extending credit given the large sums involved there is equally a point in which the mortgage has beared significant interest charges and profit for the lender given economies of scale. Is it therefore accepted that early redemption charges for mortgages are unlawful after a set period? Case law?
Page 1
    • unforeseen
    • By unforeseen 7th Oct 17, 8:35 AM
    • 1,759 Posts
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    unforeseen
    • #2
    • 7th Oct 17, 8:35 AM
    • #2
    • 7th Oct 17, 8:35 AM
    No. None.



    ***
    • kingstreet
    • By kingstreet 7th Oct 17, 9:03 AM
    • 32,079 Posts
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    kingstreet
    • #3
    • 7th Oct 17, 9:03 AM
    • #3
    • 7th Oct 17, 9:03 AM
    Appreciating that there is a cost to the lender in extending credit given the large sums involved there is equally a point in which the mortgage has beared significant interest charges and profit for the lender given economies of scale. Is it therefore accepted that early redemption charges for mortgages are unlawful after a set period? Case law?
    Originally posted by tesla2017
    Rate swaps, which tend to fund mortgage products have fixed dates and fixed charges.

    The lender still has to pay the market counterparty even if the redemption takes place just the day before the swap ends.

    Many products have tapering early redemption penalties, so on a five year fix they may fall by 1% per annum, 5%, 4%, 3%, 2%, 1% so they do in fact reflect the passing of time with an annual reduction.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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