Mortgage Redemption Penalties

artlaw

Hi, can anyone please offer any advice? I am planning to move this year but took on a 3 year discounted mortgage 2 years ago. Therefore if I settle the account early I will occur a 6 per cent redemption penalty (approx. £8000). I know that this fee was stated in the t&c's when I took out the mortgage, but to be honest I didn't expect to be moving before the time had expired. Is there any way whatsoever around this massive fee?

Any advice would be very appreciated.

dunstonh

You have virtually no chance. The fee is legal and is part of the contract you signed. You have had 2 years of discount so far and have benefited over the variable rate. That is why they want 6% back if you redeem before the tie in period.

The lenders tend to buy the money now to lend to you with that deal. They incur costs in doing so and if you redeem early, they still need those costs to be covered.

Best thing to do is not redeem the mortgage until the fee is gone.

david29dpo

i agree. you have no chance. i have just done the same with my mortgage and cannot change for 2 years but i have no intention of doing so.

Noz

The suggestion I made in the other thread still stands, check if your current mortgage is portable and if there arr any savings if you move you mortgage to a new property with your current lender