mortgage redemdemtion fees

funkybeatch

Hi everyone, we have just looked to move and found out that our mortgage provider SPML wont transfer our mortgage to another houses and you have to pay £8K for early redemtion to get another mortgage when we move home. Is there any way around this, or to reduce the cost?????
I know, we should have read the small print!!
Any advice greatly appreciated.
Cheers

dunstonh

Early redemption charges are there usually because of a special offer that had a tie in. These are published on the illustration and offer letter and your solicitor makes you aware of them before you sign the contract letter.

They are a valid charge and exist for commercial reasons (to allow them to offer the special deal). Therefore they are not considered unlawful and are not treated the same as redemption charges.

There is no way to avoid this. Some lenders though will port the mortgage to a new property on house move (some wont).

Leon_W

As dunstonh says, unfortunately there is no way round this.

You generally find that mortgages which are NOT portable are offered by lenders that securitise their mortgage books. In laymens terms this means that your mortgage and the debt/security has been sold on to another large institution or bank. SPML will take a small cut for administering your mortgage. Therefore the security is held by god knows who and they would have carefully calculated the likely returns on people redeeming loans and paid accordingly for the mortgage portfolio bought.

Most subprime/specialist lenders work on this basis, and as you have learnt to your cost, is one to look out for. Maybe you had to take what was offered but I do not want to go off in the direction of speculating about your credit history.

Best of luck