Mortage Redemption Fees- How Much?

Akira

Hello all, I am new here. My wife and I just bought a house, and because our credit rating wasn't that good we were quoted a higher interest rate, as usual, and we're tied to this Mortgage Company for 3 years. My question is, if we want to move Mortgages, we have to pay £17.000 in redemption fees. Is this amount the norm? Is there any way it can be reduced? Thanks in advance.

wearside_2

Akira wrote: »

Hello all, I am new here. My wife and I just bought a house, and because our credit rating wasn't that good we were quoted a higher interest rate, as usual, and we're tied to this Mortgage Company for 3 years. My question is, if we want to move Mortgages, we have to pay £17.000 in redemption fees. Is this amount the norm? Is there any way it can be reduced? Thanks in advance.

Is the redemption fee £17000 or £170? A full stop can make all the difference!!. If it is the former, you are being ripped off. If the latter, I suggest that you look at the documentation that you received when you took out the mortgage. If the figure is the same as now, then you have no choice other than pay it if you decide to move. If the original documents show a lower figure, contact the mortgage provider and request that you be charged the original agreed figure. There have been many posts on this site explaining this.

k1mmie

I too had a mortgage with a high redemption figure. Unfortunately when your credit is not good then these companies just rip you off. We kept ours for 2 years and swallowed the last year penalty as this was still cheaper to add on to a remortgage than keep paying for a year. So maybe that is an idea to consider.

dunstonh

Do not mistake early repayment charges with redemption charges. These companies know full well that if you have a number of years with them with no problems that the mainstream lenders are more likely to look at you. So, they add in a tie in period which they are allowed to do.

Unfortunately when your credit is not good then these companies just rip you off.

You didnt have to take the mortgage. To use this type of company you are high risk. You just have to look at the US to see how high a risk it can be. So, if you havent looked after your credit then it is only right you pay more for it.

Akira

Hi, thanks everyone. I am quite sure it is £17.000, but will double check if it is redemption charges or repayment charges- although I think it is redemption.
We did have to take the Mortgage, for many reasons(need more space, better School, house prices, etc), but especially because this was the only one who was willing to take us on. Our circumstances have now changed, for the better, so we were thinking about changing mortgages, but it looks like we are stuck with them for a couple of years! Thanks again.