moving, mortgage penalty can it be challenged successfully?

bs0u0128

im due to move and as such will pay back the mortgage in full from the sale of the house, which they will charge me around £3000 to do

is this challengeable like bank charges? or just the way it is? if it is challengeable how would one go about this?

many thanks

silvercar

generally mortgage redemption penalties are imposed when you are on a deal. Though most finish when the deal ends, there are some that "overhang" the deal ie they last longer than the deal did.

I'm afraid its all part and parcel of the package, redeem before the redmption penalty runs out and you pay heftily. redeem afterwards and pay no penalty.

If you ran your mortgage on the lender's standard rate, I doubt you would have been stung for penalties.

Check exactly when the penalties cease and do some calculations, it may pay to delay until you are penalty free.

If that is not possible there is little you can do, you signed up for a deal that had these penalties as a condition.

One way round it, is if you are buying a new place at the same time, deals are often portable, meaning they can be taken to the new place penalty free.

MortgageMamma

Yes do check if the mortgage is portable, as this could be a good option for you, but porting your mortgage is subject to your lending requirements being within the mortgage companies policy, the property you are moving into being acceptable to the lender, and all this assessment does not come without a charge.

Who are you taking your new mortgage through have you arranged it yet? You might be best getting an experts opinion on the best thing to do, mortgage lenders will have their own take on the situation and cannot be relied upon to be unbiased

dunstonh

Mortgage offer letters are normally signed as a contract and with legal advice taken. The solicitor will point out the charges that apply with tie ins before you sign the contract. Some people choose not to use a solicitor and in those cases its your own responsibility to know the charges before you sign that contract.

These are charges are fully documented and quite legal.

StratApproach

I know this does not help - but hoping to put things into perspective.

Profit margins 'can be' tight for mortgage companies and deals that have redemptions are priced in the main at a loss for the first x number of years - hence the redemption charge and the good rates offered against the Bank Base Rate.

This is my unqualified view - however in the past I was close to how the pricing of mortgage products happens.

Kind regards

StratApproach