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Paying a mortgage off early (Redeeming a
mortgage)
Although
a mortgage is expected to be a long term commitment, many people
find they can pay their loans off well in advance of the agreed
loan term. This most often occurs because the borrower moves
home.
A
borrower must understand what early repayment penalties, if any,
will apply should they clear their loan early. It is common for
lenders to claw back the value of discounts or cashbacks if a
loan is redeemed in the early years and fixed rates usually
carry early redemption penalties for at least the period of time
the rate is fixed, sometimes longer.
Many lenders make their loans
"portable" which allows the borrower to transfer
their existing mortgage amount and terms when they move
and avoid the redemption charge. However, this will usually
mean that they must still meet the status requirements of
the lender when they move and there may be disadvantages
if they need to borrow more or less than the original loan
balance. It should also be noted that all mortgage products
are not portable.
Our advisers are on hand to help, please
use our enquiry forms.
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