Mortgage redemption fee

chickaroonee

Hi

I'm just sitting down with DH to check any fees he has paid on the mortgage. He had a mortgage with the Chelsea building society from 2002-March 2004 then switched. I'm not sure if he paid an exit fee or not, but can get him to find out by calling.

I've found some paperwork which has the following clause:

If you redeem the mortgage before 1 February 2004, or you make a repayment of capital earlier than you are contractually required to do, then you will be required to pay an additional fee of 3% on the redemption moneys or early capital repayment.


I'm a bit confused by this - doesn't take much!

Does this mean that he would have only paid this fee before 1 Feb 2004? It's the repayment of capital bit that confuses me.

Any help appreciated.

dunstonh

The 3% refers to the early repayment charge. The lender imposes these to stop people taking the benefits of the deal and leaving before the lender can recover its cost. They are fair and legal and common sense.

The redemption charge would have been upto £250 typically.

You have no right for a refund on this, if paid, unless the figure you paid was higher than what the charge was when you started the mortgage (or the last deal you bought whichever is later). If it was higher, then you can ask for a refund of the difference.

chickaroonee

Thanks. I thought it referred to the early repayment charge, which he understood and was fair.

I know a refund is only repayable if the exit fee was more than he signed up for, it's just I can't find any record of how much was in the original mortgage stated, or how much was paid.

He will have to call the Chelsea and ask I guess.

chickaroonee

turns out he was over charged- not much only £15 - but will be getting a refund so can't complain!