Advise needed on remortgaging and redemption fees

MoscowFlyer

Our two year fixed deal runs out in August, at which point we will be looking to sell up and start renting, keeping the equity in the bank for a year or so until we see what happens with the housing market.

With the current lender, we would have to pay £10,500 as a redemption fee. Do all mortgage lenders have these fees? I'm wondering if it's ok to change to a new lender, then hopefully sell up within a couple of months and just pay back the balance without any redemption fee.

Do redemption fees become null and void so to speak after the two year fixed period or will they remain in place as long as we stay with the lender?

Thanks

col97

redemption penalties normally apply just for the deal period but if you aren't sure call your mortgage company they'll know your terms of contract. Make sure you get them to confirm in writng what the say over the phone. They can be tricky if you have no proof.. All lenders do have these penalties if you take a deal....Good luck.

dunstonh

With the current lender, we would have to pay £10,500 as a redemption fee. Do all mortgage lenders have these fees?

That fee exists because you are still within the tie in period of that deal. Once you are outside of the tie in period the early repayment charge will cease.

I'm wondering if it's ok to change to a new lender, then hopefully sell up within a couple of months and just pay back the balance without any redemption fee.

If you plan to sell up then its pointless remortgaging. You will just incur unnecessary costs.

Soph

Hi Moscow Flyer

Is there any way you can dig out your original mortgage offer? Mortgage early repayment charges vary from lender to lender and product to product, so it will depend on the actual terms and conditions of the mortgage you were offered.

If you can't find it, you'll need to ring your lender and get a copy of them. Like col97 says, it's best to get written documentation.

Even if you change to a new lender, if you are still within your early repayment charge period they would still apply as you would be repaying the mortgage with your current lender. Usually the only way not to pay the early repayment charges is to wait until they expire.

Hope this helps

MoscowFlyer

Thanks, my broker's on holiday and the actual lenders are useless on the phone, so I thought I'd ask here. We'll just sell up then and try to get a deal in place to complete just after the deal expires.

MoscowFlyer

And aplologies for the poor grammar in the title!