a fee to change to another lender at the end of my term - is this right?

evosy1978

My financial advisor told me today that most mortgage lenders charge a fee to change to another lender at the END of the 2yr fixed rate...

Ive never heard of this before.. is this common with all mortageages.

thanks

getmore4less

YES.

why not look for a mortgage where you may not need to change lender?

evosy1978

i dont understand. the rate will go back up after fixed rate is up?

getmore4less

evosy1978 wrote: »

i dont understand. the rate will go back up after fixed rate is up?

It might on the product you are looking at what are the 2 rates?

The follow on rate is critical to getting a good deal, you have no idea what the rates will be in 2 years relying on the ability to remortgage does involve risk, as a lot of people are finding out.
You have been advised of this risk?.

Many products have low(medium) follow on rates which can make them better risk choices


If your advisor cannot explain the relevence of this then maybe they are not that good.

herbiesjp

Or you could find a lender that does not charge that fee - not all lenders charge an exit fee.

You would really need to take that fee into account when looking at the overall costs and comparing deals.

Cannon_Fodder

Or look for a 5yr deal and cut out at least 1 set of fees...

herbiesjp

or a 5 year fix with not exit fee!!

dunstonh

Or go with the deal that is most cost effective over 5 years and not focus on rate alone or charges alone but take both into account.

evosy1978

thanks..

all great advice..

Ive only had an initiall interview with a FA in my local area. Ive now gota get the house then go back to him to properly sit down and look through mortgage deals.

He only gave me some example of a couple that fit my criteria. He reckoned most charge this fee.

i understand regarding taking into account the rate which the mortgage reverts to when the fixed rate is up .. This is very good advice i hadnt thought of. A

Can someone answer me this - if i find a deal on the internet - for example on a financial comparison site. If my FA is whole of the market then should he be able to find this deal as well...?

thanks again.

getmore4less

herbiesjp wrote: »

Or you could find a lender that does not charge that fee - not all lenders charge an exit fee.

You would really need to take that fee into account when looking at the overall costs and comparing deals.

Can you produce the list?

herbiesjp

Not sure about a list, but C&G and NR are two lenders that spring to mind who don't have an exit fee.