Mortgage Redemption Penalties - Lawful or Not ??

Andy_L

GunJack wrote:

I am a Civil Servant, and what with the Lyons report being actioned (moving loads of CS out of the "South East", although my location is not really in the bounds of that, being in East Anglia), I now have the very real threat of being forced to move. However, if I have to cough up the ERP

No you won't, the department will pay the penalty charge (in addition to all the other costs of moving)

dwight-van-man

Ok - check if your mortgage is portable - it probably will be in which caase the lender gives you a window of time in which to 'reactivate' the loan on the same terms and will refund the redemption penalty. Under most firms relocation plans, they will also pay costs associated with moving so you could claim the penalty back from your work (and if you're really fly, then port your mortgage and get it refunded anyway.....)

BTW, I work for a bank and I really detest civil servants;)

GunJack

Andy-L - they do at the moment, however part of the proposals for "updating" the moving package include limiting ant ERC to 6 month's-worth :mad:

d-v-m.....that is next on my list of things to check, the portability of the existing loan..

...as for you hating the CS.....I'm not overly-fond of bank staff, either :laugh:

StratApproach

I have worked in a large financial institution pricing up mortgages and in most cases there is a negative margin to the insitutution in the first number of years (on exclusive deals especially - these deals are common place now due to competition). And therefore has to factor in 'Early Repayment Charges' to make the deal worthwhile - used to be known as a penalty.

A long time ago most people would have a mortgage for life with the one provider, but taking more moving a mortgage is becoming as common as buying a new pair of shoes.

I have just renewed my mortgage (discount) and have gone for one without ERC's, knowing full well that the rate is not great but gives me the opporutnity to stick 'fixed it' if I felt the payments were going to go through the roof due to further rate increases.

StratApproach

StratApproach

Have you thought about letting the property?