Interesting Article of Mortgage Redemption Fees

[Will Scarlet]

Thought some people might find this interesting. Sort of puts the ERC's into perspective!

 

http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=416828&in_page_id=8

[ellielou]

Hi Will

 

Thanks for posting this - however, the article relates to exit fees which are a seperate issue to those of ERC's.

 

ellielou x

[Notty]

Hi Ellilou

 

Can you tell me what the difference is? Never heard of exit fees.

[Deepthroat]

When you redeem a mortgage there are two possible fees to pay.

 

1) ERC

 

This is an Early Repayment Charge. Basically, when you sign up to either a discount or fixed interest rate, in return for a lower rate you agree that if you redeem your mortgage whilst this interest rate is applied to your mortgage, you will pay the Mortgage company upto 6 months interest.

In worst cases this can be several thousands of pounds

 

2) Final Redemption Charge / Exit Fee / Deeds Fee

 

This charge is incurred if you redeem your mortgage before the end of it's natural term. This charge is usually a maximum of £295.00

[maroonfox5]

I can.....

 

Mortgage exit fees are the charge made by the lender to end the mortgage i.e admin costs ,land registry fees etc.

 

ERC is a separate charge/penalty usually a % of the loan added to the outstanding amount at redemption

 

Hope this helps

 

Regards

 

MF5

[Will Scarlet]

ellielou - point taken, these are two different beasts but, I think it is interesting that exit fees of £200-295 are deemed to be unreasonable by the powers that be....do you not think that could have a knock on effect with ERC's? It surely adds some weight to the argument.