Changing mortgages

Raz

Raz

Raz

Soldato
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Um...some help?

My brother is looking to switch mortgages to a different lender (or switch product with the same) and has been told that the cost to change will be £10,000 - is that right? I thought it would be a £1000 at the most. This is of course before his product finishes which is in October 2009...

:eek:
 
Could be. I'm currently looking at mortgages and I've seen redemption penalties as high as 4% of the loan (£10k would be for a £250k loan in that case). Need to check what he's signed up to.
 
scorza said:
Could be. I'm currently looking at mortgages and I've seen redemption penalties as high as 4% of the loan (£10k would be for a £250k loan in that case). Need to check what he's signed up to.
Click to expand...

I think it's 5%, which is just stupid. I can understand a penalty fee, but that much just seems ridiculous.

Oh well...interest rate increases for the next two months. Who knows, perhaps it will start going lower after that?

yeah....
 
I know I have a penalty fee of nearly £5000 if I try to finish or swap my mortgage before it's term is up. Therefore I presume £10k could be easily correct for someone else on perhaps a larger mortgage or a different lender.
 
You have to look at the big picture as to why there are penalties for moving.
Usually it is because you've got a "deal" or preferred rate on your mortgage which is in place for a certain nnumber of years.
If you leave before that number of years is up then they won't have made back any money on you, so they add in a panalty clause.
It is the same for general extra repayments, many mortgages will only allow you to make a few extra payments during the term without penalty.

We're currently in the process of moving our mortgage from The Halifax to The Cambridge building society.
If the mortgage goes through on or before 1-5-07 then we would have to pay a £1100 early redemption penalty.
If we wait until the 2-5-07 then the only fee from The Halifax is a £100 admin fee (which The Cambridge are picking up for us, along with all their own fees) so it won't actually cost us anything to move.

We will be locked into the new mortgage with The Cambridge for 2 years, however their Early Redemption fee is only actually £60 at any stage - so we could move away from them very easily and for very little money.
However as we're getting a good deal from The Cambridge (building societies do seem to offer good rates and we are already members of the society through virtue of a savings account) I doubt we will be wanting to move on for a while anyway.
 
stoofa said:
You have to look at the big picture as to why there are penalties for moving.
Usually it is because you've got a "deal" or preferred rate on your mortgage which is in place for a certain nnumber of years.
If you leave before that number of years is up then they won't have made back any money on you, so they add in a panalty clause.
It is the same for general extra repayments, many mortgages will only allow you to make a few extra payments during the term without penalty.

We're currently in the process of moving our mortgage from The Halifax to The Cambridge building society.
If the mortgage goes through on or before 1-5-07 then we would have to pay a £1100 early redemption penalty.
If we wait until the 2-5-07 then the only fee from The Halifax is a £100 admin fee (which The Cambridge are picking up for us, along with all their own fees) so it won't actually cost us anything to move.

We will be locked into the new mortgage with The Cambridge for 2 years, however their Early Redemption fee is only actually £60 at any stage - so we could move away from them very easily and for very little money.
However as we're getting a good deal from The Cambridge (building societies do seem to offer good rates and we are already members of the society through virtue of a savings account) I doubt we will be wanting to move on for a while anyway.
Click to expand...

Yes, I understand why they do it but think it's way too much. You got a good deal though :)

This is from Birmingham Midshires which I believe is also part of the Halifax group.
 
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