Mortgage - Early redemption fees, options?
Discussion
As some of you may be aware I work in finance so am not completely naïve to these issues but feel I may have screwed up a bit when selecting my mortgage.
Basically, I had assumed the early redemption fees would fall as I progressed through my 5 year fixed period, giving me greater flexibility as time passed. A quick call to Santander today appears to suggest this isn't the case. So even after paying front loaded interest payments they also want to pull my pants down on the way out... great.
My situation has changed and it may well be that I need to step out of the housing market for a while. It appears I will be absolutely hammered by ERFs if I chose to do this.
Any options (besides porting) in these circumstances?
Basically, I had assumed the early redemption fees would fall as I progressed through my 5 year fixed period, giving me greater flexibility as time passed. A quick call to Santander today appears to suggest this isn't the case. So even after paying front loaded interest payments they also want to pull my pants down on the way out... great.
My situation has changed and it may well be that I need to step out of the housing market for a while. It appears I will be absolutely hammered by ERFs if I chose to do this.
Any options (besides porting) in these circumstances?
TheInternet said:
DoubleSix said:
even after paying front loaded interest payments
Do you mean this? Seems odd.Again, why I'm feeling a bit sore to say the least!
Sharted said:
Some lenders will return the ERCs to you if you take out a new mortgage within a defined period, say 6 months.
Interesting, probably won't apply to me, but appreciate the input.Does seem wrong though. Surely the front loaded interest is there to ensure they get their pound of flesh, the ERC just seems punitive. Relationships break down, people get ill, job offers abroad etc. Things change!
DoubleSix said:
Interesting, probably won't apply to me, but appreciate the input.
Does seem wrong though. Surely the front loaded interest is there to ensure they get their pound of flesh, the ERC just seems punitive. Relationships break down, people get ill, job offers abroad etc. Things change!
Not clear on what you mean by front loaded interest.Does seem wrong though. Surely the front loaded interest is there to ensure they get their pound of flesh, the ERC just seems punitive. Relationships break down, people get ill, job offers abroad etc. Things change!
Do you refer to early payments being made uop of mainly interest and later ones mainly capital?
DoubleSix said:
Interesting, probably won't apply to me, but appreciate the input.
Does seem wrong though. Surely the front loaded interest is there to ensure they get their pound of flesh, the ERC just seems punitive. Relationships break down, people get ill, job offers abroad etc. Things change!
Of course but the lender will simply refer you to your mortgage offer......it will be there in black & white. Most people though will skim read most things and not consider the details fully, as in most cases, redeeming the mortgage early probably part of the initial plan......Does seem wrong though. Surely the front loaded interest is there to ensure they get their pound of flesh, the ERC just seems punitive. Relationships break down, people get ill, job offers abroad etc. Things change!
DoubleSix said:
Sharted said:
Not clear on what you mean by front loaded interest.
Do you refer to early payments being made uop of mainly interest and later ones mainly capital?
Yes exactly.Do you refer to early payments being made uop of mainly interest and later ones mainly capital?
In regards to the mortgage, what are your ERCs, tie in term and how far are you through it?
Sharted said:
Not clear on what you mean by front loaded interest.
Do you refer to early payments being made uop of mainly interest and later ones mainly capital?
Correct!Do you refer to early payments being made uop of mainly interest and later ones mainly capital?
If you have a mortgage, dig out your mortgage offer or KFI and there should be a schedule showing the differential between interest & capital changing over the term of the mortgage with more interest being paid at the start....
CaptainSlow said:
DoubleSix said:
Sharted said:
Not clear on what you mean by front loaded interest.
Do you refer to early payments being made uop of mainly interest and later ones mainly capital?
Yes exactly.Do you refer to early payments being made uop of mainly interest and later ones mainly capital?
In regards to the mortgage, what are your ERCs, tie in term and how far are you through it?
I hear you. It's just in my case it's more like 22k which is a lot to hand over to a large corporation that has enjoyed a tonne of interest in the last two and half years. We need every penny right now.
Just don't feel my mortgage advisor really rammed this home.
My fault though, before anyone kindly points that out.
Just don't feel my mortgage advisor really rammed this home.
My fault though, before anyone kindly points that out.
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