The early repayment charge, or redemption charge, is made by the mortgage lender on certain types of loans, usually discounted or fixed interest rate loans. The charge is applied if the loan is redeemed or part-redeemed with the specified early repayment charge period. Beware, not all lenders will point this out to you. More importantly you may miss it in the excitement of getting a mortgage.
If you lender is offering you a fantastic offer of a low interest rate, it does not do any harm to check out the early repayment charge, just ask the question.
The early repayment charge can amount to a substantial amount up in the thousands, check the amount could be when you take out your mortgage. If you think there is any chance that you might want to pay off your mortgage early question how you avoid paying. Also remember paying off the mortgage early can sometimes be unavoidable: losing your job, divorce, death or more cheerfully receiving an inheritance. Read the small print of your mortgage documents carefully
7th August 2008Read Full Question and Response
