Mortgage early repayment fees when staying with same lender - HotUKDeals
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Mortgage early repayment fees when staying with same lender

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I'm toying with the idea of buying out of my current mortgage term with approx 13 months to go. The buy out fee is around £7000 but my lender has far better products avaivable than what I'm on current…
darlodge Avatar
3m, 2w agoPosted 3 months, 2 weeks ago
I'm toying with the idea of buying out of my current mortgage term with approx 13 months to go. The buy out fee is around £7000 but my lender has far better products avaivable than what I'm on currently so I've estimated that after 5 years, I'd be approx £17,000 better off by changing products. Clearly I'd have to factor in the repayment fee but even with that, I'd be saving in the region of £10,000.

I've always waited until the end of the mortgage term before changing before so not sure if the early repayment fee needs to be paid upfront or whether it's added to the mortgage?

My advisor is on holiday so I'll ask him when he's back but I just wanted to get some opinions as I'm keen to take advantage of the 5/10 year plans being offered.

Thanks
Darren
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darlodge Avatar
3m, 2w agoPosted 3 months, 2 weeks ago
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#1
Usually you can add the fees to the mortgage, UKT be aware it may push you over a LTV threshold for the rate your looking at - and you will be charged interest on the fee if you add it on.
#2
paul1005
Usually you can add the fees to the mortgage, UKT be aware it may push you over a LTV threshold for the rate your looking at - and you will be charged interest on the fee if you add it on.


​Cheers Paul, it's frustrating as if I moved, my lender would drop the repayment charge but as I'm just remortgaging, the fee remains :(
#3
Usually if you move you still have to pay the fee unless you "ported" the loan which is basically continuing the loan with the same rate on the new property. Unfortunately it's virtually impossible to get out of a fixed rate (I'm assuming that's what you have) early without paying the penalty.
#4
Yes we're in a fixed rate for another year still but with the mortgage rates at the rate they are now it's a fair amount less than we're paying now,hence the 17k saving.

I know it's guess work but I've read reports that the mortgage rates are estimated to increase come the next year as Brexit gains some steam, I'd rather fix in now as they can really get much lower.
#5
It wont be a saving over 5 years, it wil, be the difference over the 13 months you have left. You could wait 13 months then no early redemption charges, then you can take out a 5 year or even longer fixed mortgage. As banks and building societies are offering these very low long term offers, they must have a good knowledge that rates wont go up.
We had the same thoughts 3 years ago when we had around 18 months left, we decided to leave it until the fixed rate mortgage we had ended. Im glad we did as the offer we got after waiting was .75% less, so even better.
#6
The part I'm trying to predict (and it's almost impossible) is the rates that will be available in 13 months.

We're paying 4% currently and rates now (fixed for 5 or 10 years depending on vendor) are around 2.29% which is a huge difference. I can't see rates being that low in 13 months but if they are 3% id snap it up as I'd still save money per month and avoid the repayment fee.

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