Mortgage Redemption Penalties

rich50_2

Hi Everyone

I'm new to the site and this is my 1st post.

I have recently sold my house and am having to pay out thousands in a Mortgage Redemption Penalty to West Bromwich Buildings Society.

My question is does this penalty come under the same law as the Bank Charges? and if so is there anything different I have to do compared with trying to reclaim Bank charges.

Many Thanks in advance for your help

Rich

lardy2

if you signed for the mortage and you sold it with in the tie in period then i am sty but you just have to pay them.
however if you are buying a new house then check with your current lender to see if your mortgage is portable and if it is take it with you and get a top up on it then they will not charge you a penalty

dunstonh

My question is does this penalty come under the same law as the Bank Charges? and if so is there anything different I have to do compared with trying to reclaim Bank charges.

Not even close. The charges are quite legal and quite fair.

As lardy says, if you are moving house, then the mortgage may be portable allowing you to avoid paying them.

jamesd

rich50, it's usual for deals with tie-in periods to be cheaper than leave any time deals. In general if you agree to the tie-in you knowingly made the choice to accept the lower rate and repay the difference if you leave early, via the early repayment charge. The lifetime tracker is the basic deal that you'd compare with to see the discount you're getting by agreeing to a fixed time. Rate fixing deals are a bit different because you're also paying for the mortgage company taking (or paying someone else to take) the interest rate rise risk.