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What is an Early Repayment Charge?

Posted on Monday, 6th October 2014 by
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Most mortgage products have a penalty charge to pay if you redeem the mortgage within a certain period of time. The exact amount depends on the type of mortgage you have and your lender. It is usually equivalent to one or two month’s interest. The earlier in the term you repay the loan, the higher the charge. An early repayment charge can add a considerable cost to your loan.

Different loans use different names for this charge, the common ones are:

  • early repayment charge
  • early repayment penalty
  • early redemption fee
  • redemption charge
  • financial penalty

 

There is no real way of avoiding this but most lenders will allow you to port your mortgage from one property to another without having to pay the redemption charge. If you are looking to port your mortgage and your lender has agreed to waive any early repayment penalty you will need to inform your conveyancer. Your mortgage lender may not tell your conveyancer about this and it will not be clear from the offer.

Our Solicitors in Leicester are experts in their fields and dedicated to quality client care. If you would like to find out more about our solicitors in Leicester please contact us.

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer.  If you are interested in obtaining advice, please contact one of our solicitors who will be happy and able to advise you on your own particular circumstances.

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The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.

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