Moving house & paying off existing mortgage - Early Redemption fees!

MH233

I am moving house in the summer and currently have a mortgage with Leeds & Holbeck. There is 10 months left on my existing deal and they want £2222 for an early redemption fee and £199 discharge fees. I thought about paying off some of the mortgate and leaving the account open paying off almost all of the loan barr £500. They say I cannot do this if I am moving home. Does anyone else have an experience like this with this company or has anyone done this practice? Leeds & Holbeck could not give me a good deal at all and their rates were poor. Any advice regarding my next course of action would be helpful. Thanks

Leon_W

If your mortgage is portable take your existing loan with you to the new property. Ask Leeds for any additional borrowing that you may require on any deal that doesn't have redemption penalties, maybe the standard variable rate.

That way, when your deal expires you can pick the whole lot up and move it elsewhere.

OK, you may be paying slightly more for a few months but it should be a hell of a lot cheaper than paying the £2222.

dwsjarcmcd

Yes, port the existing loan and take an additional mortgage with them that does not attract early redemtion charges and make your decision on whether you stay with them or remortgage elsewhere in 10 months.

You cannot avoid this charge if you remortgage away and I am certain you can't make up in excess of £2k in reduced payments, over the next 10 months

David

silvercar

You cannot avoid this charge if you remortgage away and I am certain you can't make up in excess of £2k in reduced payments, over the next 10 months

I agree, as that would mean finding a mortgage over £200 per month cheaper.

But, bear in mind that L & H will charge you a valuation on the new property and so will the new lender in 10 months time.

MarkyMarkD

The advice from all the others is spot on.

You cannot redeem your mortgage without paying it off in full - in others words, you can't sell your house without doing so. So ideas of "leaving £500 outstanding" won't wash. Furthermore most lenders will charge you the early repayment penalty if you make a substantial capital payment, not just if you redeem, on the amount repaid, so repaying everything except £500 (even if you could) would probably trigger most of the penalty in any case.

jamesd

Find out if the early redemption fee is a percentage of the balance at the time the mortgage is ended. Then find out how much you are allowed to overpay without paying the penalty. It is possible that you can make a high enough overpayment to reduce the fee significantly.

As MarkyMarkD says it is entirely possible that this isn't an available option but it is worth investigating.