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Redeeming Skipton Mortgages
Senior_Paper_Monitor
Posts: 2,918 Forumite
This is one we have just 'nearly' tripped over ...
In the great majority of cases if the mortgage holder (with Skipton) completes a remortgage at any time other than last day of the month they will pay the remainder of the month's interest (at SVR - currently 4.95%) as a penalty.
So if the mortgage holder's deal period ends on 2nd of Month, they would normally look to remortgage on 3rd Month - but if the do so they will pay a c£13.56 x c28 days = c£380 penalty on every £100,000 borrowed for the privilege (on a 2 year mortgage that's c£15 per month per £100,000 which isn't calculated into the comparison equation).
If you delay the remortgage completion to the end of the month the mortgage holder will, on typical 2.68% tracker, will pay an extra c£175 in interest compared with the deal rate during the period.
Obviously the sensible answer is to complete the original Skipton mortgage a couple of days before month end (5 would appear to be sensible to allow for weekend/bank holidays) but rarely is anyone in that much control.
Stage managing the remortgage away from Skipton is inevitably a juggling act to ensure that, potentially considerable, unnecessary costs are avoided.
Having reviewed the documentation and several enquiries to Skipton receiving decidedly unclear responses from different departments, I consider the issue unnecessarily confusing and simply a 'back door' overhang stratagy which is inherently unfair to the customer.
In short brokers and Skipton 'do it your selfers' beware !
In the great majority of cases if the mortgage holder (with Skipton) completes a remortgage at any time other than last day of the month they will pay the remainder of the month's interest (at SVR - currently 4.95%) as a penalty.
So if the mortgage holder's deal period ends on 2nd of Month, they would normally look to remortgage on 3rd Month - but if the do so they will pay a c£13.56 x c28 days = c£380 penalty on every £100,000 borrowed for the privilege (on a 2 year mortgage that's c£15 per month per £100,000 which isn't calculated into the comparison equation).
If you delay the remortgage completion to the end of the month the mortgage holder will, on typical 2.68% tracker, will pay an extra c£175 in interest compared with the deal rate during the period.
Obviously the sensible answer is to complete the original Skipton mortgage a couple of days before month end (5 would appear to be sensible to allow for weekend/bank holidays) but rarely is anyone in that much control.
Stage managing the remortgage away from Skipton is inevitably a juggling act to ensure that, potentially considerable, unnecessary costs are avoided.
Having reviewed the documentation and several enquiries to Skipton receiving decidedly unclear responses from different departments, I consider the issue unnecessarily confusing and simply a 'back door' overhang stratagy which is inherently unfair to the customer.
In short brokers and Skipton 'do it your selfers' beware !
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