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Calculating Redemption Charge
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tesuhoha
Posts: 17,971 Forumite
We have a 5 year fixed rate mortgage at 5.74% and the special rate ends in June this year. I think the mortgage is about £48,000 without looking at it, then after June it continues at the base rate for the rest of the term. We also have an additional further advance of £26,000 which is over the mortgage term of 9 years which we took out when we moved to buy our new house. This is at the mortgage base rate. We were advised to do this when we moved 6 months ago because of the high redemption fee we would pay otherwise. The mortgage lender Nationwide was very cagey about the fee and never actually told us.
However we are finding this very expensive and there are better deals out there. At the moment we are paying over £1,000 per month yet even with Nationwide if we remortgaged at a fixed rate our MP would work out between £850 and £862 depending on the deal we went for. This at £150 cheaper approximately would save us about £900 between now and June and would ensure that we catch the low rate at the moment. The fee is £499 for remortgaging with Nationwide but existing customers get £100 discount from this. The only drawback is the redemption fee we would pay. Does anyone know how to work this out on a fixed rate and what do you think? Are we doing the right thing by remortgaging now or would we be better waiting till the summer? I am suspicious that this fee is not going to be all that much.
However we are finding this very expensive and there are better deals out there. At the moment we are paying over £1,000 per month yet even with Nationwide if we remortgaged at a fixed rate our MP would work out between £850 and £862 depending on the deal we went for. This at £150 cheaper approximately would save us about £900 between now and June and would ensure that we catch the low rate at the moment. The fee is £499 for remortgaging with Nationwide but existing customers get £100 discount from this. The only drawback is the redemption fee we would pay. Does anyone know how to work this out on a fixed rate and what do you think? Are we doing the right thing by remortgaging now or would we be better waiting till the summer? I am suspicious that this fee is not going to be all that much.
The forest would be very silent if no birds sang except for the birds that sang the best
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Could you call them and ask what your redemption fee is? This is what I did A while back when I was working out whether to pay off an additional mortgage account early.MFIT No. 810
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Yes thats what I plan to do but Im impatient; theres noone there today and they didnt tell me before when I asked. They just kind of steered around the question until I forgot about it. However, yes I will do it. I did have the information on how to work it out but I cant find it since we moved.
Incidentally, if you dont mind me asking, how much did yours work out to be, and was it worth remortgaging?The forest would be very silent if no birds sang except for the birds that sang the best0
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