Remortgage Early - Avoid Redemption Fees?

Pegleg2001

I have a Northern Rock mortgage rate of 5.49% which is due to expire in Nov 06 (the first six months were at a low 'sweetener' rate). Early redemption to Nov 06 attracts a substantial fee.

Can I avoid said ER Fee by remortgaging now with another provider, repaying most of NR mortgage leaving only a small balance - and then continue to pay a small monthly payment to NR until the period lapses?

Thanks in adavance.

AndrewSmith

Pegleg2001 wrote:

I have a Northern Rock mortgage rate of 5.49% which is due to expire in Nov 06 (the first six months were at a low 'sweetener' rate). Early redemption to Nov 06 attracts a substantial fee.

Can I avoid said ER Fee by remortgaging now with another provider, repaying most of NR mortgage leaving only a small balance - and then continue to pay a small monthly payment to NR until the period lapses?

Thanks in adavance.

Not possible I'm afraid as the Northern Rock currently hold first legal charge. ALso you will pay the fee in proportion to any amount you repay, thus saving nothing.

You can secure a new product now and have it ready to switch to in November

Andy

MortgageMamma

In short, as Andy has said, no. You could secure a new product now to get a good rate, but make sure you look again around October to make sure there's nothing better available.

HTH and GL

Pegleg2001

Thanks for the clarification!

Do you mean secure a deal with NR or look elsewhere?

MortgageMamma

Both. Ideally you should ask NR what they are prepared to give you but I doubt very much they would tell you so soon before Nov. Worth a try! Then instruct a whole of market mortgage broker to search the market for you, if you like what you see, apply for a deal, and specify completion after yur deate in November. You will need a fee's free broker in this instance or you incur some nasty charges and upset the broker if you don't complete on the deal. You also need all fee's adding to the loan and to check there will be no penalties ie the lender cannot charge you for the valuatoin/admin if you don't proceed.

Then, later in the year, have a look at what else is on the market, and if its not as good stick with the original deal.

Not the most ethical way of doing things but if you are honest with your broker from the start there shouldnt be any probs.

claires30

I had a mortgage with NR and redeemed it about 3 years ago so I know things have probably changed, but i was tied in for 5 years with the first 2 being the sweetner, as you put it. I actually sold after 4 years and ended up paying no redemption, contrary to what my contract said. ... i nearly fell off the chair when I spoke to them and asked for a figure. It might be worth checking rather than simply assuming that you will have one.
It's worth finding out for sure rather than assuming.. but don't get your hopes up.

Pegleg2001

Thanks for the advice - but I doubt they will forget the ER fee.

About 6 months ago, they called me to offer a so-called "mortgage review" at a lower rate - but then said they would add the early redemption fee to the new morgage. Yeah, right.

I have instructed L+C to see what alternatives are on offer.

Jorayner

We have just switched to a new deal with Nationwide as we come to the end of a 2 year fix with them at the end of August.

I didn't realise, but they will let you switch deals in the last 3 months of a fix with no penalty. Our new rate starts 1 August now - we could have had 1st June if I had realised, but I still saved an extra £70, and fixed before they changed the fixed rates again.

Might be worth asking if NR have a good deal you like.

dewmass

I am in a very similar situation to the OP and was wondering when to start looking for a new deal. Is there any kind of search you can do for a whole of market advisor? I am looking for a no fees lifetime tracker that I can overpay without penalty.

AndrewSmith

What are the figures involved?

Should be able to point you in the right direction.

Cheers

Andy

dewmass

Currently, I stand at £60,500 over 20 years. Am hoping to get this down to £55,000 over 10 years with my new deal. Have looked at Skipton, Alliance + Leicester(£99 Fee) and Woolwich deals. Halifax deal end on November 1st.

Your help would be much appreciated btw, cheers!