i dont get it mortgage redemption penalties

little_miss_spender

I am with a mortgage provider for people with not too good a credit history only 1 ccj that had been paid off 4 years previously and the odd default poss 2 . re business. we remortgaged 3 times over the last 6 years and every time we have been charged a redemption fee of thousands,we were told by the advisor that this had to be the case. But i could understand if we were moving mortgages and taking the business away from them but we werent it was just a further advance on the original mortgage. but they insisted that every time we have a new mortgage with new account number to replace the old one. I being gullable did what I was told by the advisor but it seems a lot to pay out the first time after 2 years charged 5,000 then second time 3,000 then 3rd time 2,600. they have sent a letter saying if we repay early or redemption penalty this time will be 7,500. They state in their letter that after 3 years the penalty is just one months interest payment. is this how they keep on charging us because they keep replacing the old mortgage with a new one so they can charge like we have only had the mortgage for 2 years. instead of just remortgaging or 2nd advance whatever it is. i am baffled please give me some advice to prove i am not that stupid. thank you .

payless

Does look like they set up a new arrangement each time...

1. likely paying broker fees again

2. Incurring penalty each time.

Whether this was the only option at time ??? worth asking

1. could a further advance had been tagged on instead
2. Surprising that even though adviser was recommending a "new arrangement" that it was same lender each time... one would have thought if incurring the penalty, at least you would have been free to look at other deals on market ( although of course he might have done this and found their rates the best each time)

Is adviser still around? you could ask him for reasons

little_miss_spender

Thanks for your advise but it is just so complicated to explain. I agreed to all this at the time so i probably have no come back on anyone except myself. I just wanted to know if they are legally allowed to charge you whatever figure they want to remortgage with the same company. it seems odd that every time i remortgaged i had to start all over again with a new mortgage. so i was classed as a new customer so even though i may have been with the company 4 years in total, and i had paid my mortgage on time for 4 years but remortgaged inbetween, i am still penalised. that is where it seems unfair. i didnt take the mortgage somewhere else i was giving them more business?????????? i cant ask the mortgage adviser he is a really nice guy and i dont want to upset him.

payless

i cant ask the mortgage adviser he is a really nice guy and i dont want to upset him.

a really nice guy who may have earned himself the fee 4 times over .

homer_j_3

who is your lender?