How to avoid an Early redemption charge ?

edited 31 July 2017 at 8:50AM in Mortgages & endowments
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logzladlogzlad Forumite
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edited 31 July 2017 at 8:50AM in Mortgages & endowments
Hi All,
I would be most grateful if any body can advise about the following situation:-

My daughter and husband re-mortgaged their house earlier this year on a 5 year fixed deal at 2%. Now they have decided to move to a larger much more expensive house and I think because the LTV is too high, their building society won't let them port the mortgage over to the new property. They are saying that they would have to default to the SVR which is about 5%. The ER payment would be in excess of £3000 which is a big hit.

They have about £35000 equity in the house they are selling, which is valued at £105,000 and the house they want to buy is £240000.

Thanks in anticipation

Replies

  • BorisThomsonBorisThomson PPR
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    They agreed to it at the time of taking the mortgage, if they now wish to redeem the mortgage they're going to have to pay it.

    I'm not sure what else you want us to tell you!
  • logzladlogzlad Forumite
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    Thanks Boris, It was just in case there is a way round it
  • amnblogamnblog Forumite
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    This will be a lesson for them on planning ahead.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • getmore4lessgetmore4less Forumite
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    My daughter..........They have about £35000 equity in the house they are selling, which is valued at £105,000 and the house they want to buy is £240000.

    that's going from 66% LTV to 85%LTV.

    Thanks Boris, It was just in case there is a way round it

    big gift from bank of mum and dad to meet the lenders LTV porting requirement.
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