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Mortgage
Guide
Click for Full Contents
The Costs of a Mortgage in the UK
Mortgage Costs - Final Payments / Exit Fees / Early Repayment Charges / Redemption Fees
Final Fees - The Sting in the Tail
Many lenders approach the end of the mortgage term believing that once the final month's payment has been made, they won't owe anything else.Unfortunately, this is not true. In fact, the ramping up of so-called exit fees over the last few years has become something of a scandal, and is currently under investigation by the FSA (Financial Services Authority), the body responsible for regulating finance products. Exit fees are also known as redemption fees.
Some examples of exit fees:
* Deed Release Fee
* Sealing Fee
* Final Administration Fee
* Final Redemption Fee
In addition to exit fees, there are a few other terminal fees you may have to pay, particularly if you end the mortgage before the end of its term, or during a deal period, when the interest rate is fixed or guaranteed in some way. These fees are known as early repayment fees.
Ending your mortgage during a fixed/tracker/discounted interest rate period can incur costly early repayment fees, with many lenders charging a percentage fee based on the amount outstanding on the mortgage - for example, 1% for each year still left to run, on a fixed or discounted rate deal.
If you are not confident that you will keep the mortgage for the length of such a period, it can be cheaper to opt for a higher interest rate mortgage with no tie-ins - get your advisor to do the sums and see which will be cheaper.
Some lenders apply Early Repayment Fees throughout the life of the mortgage, in an attempt to tie you to them for 25 years. These fees are known as overhanging lock in or early repayment charges. Make sure you know if these apply to your mortgage.
To find out more about early redemption penalties, read Early redemption penalties explained
and How to avoid paying an early redemption penalty.
To read more on this subject please see the list below or your mortgage guide or your home buying guide
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Read On
The Costs of a Mortgage in the UK
General costs of getting a mortgage
Hidden / True costs of home buying and mortgages
Charges at the start of a mortgage
Arrears Fees / Costs of falling behind payments
Fees for changing your mortgage
Final Payments / Mortgage Exit Fees
Why The Mortgage Lenders are So Greedy
Read On / Mortgage Guide
How
to Choose your Mortgage
Types of Mortgage
Remortgages
Where to Find Your Mortgage
Getting a Mortgage in Principle
Read On
Guide to Buying a Home in the UK
Guide to UK Home and Mortgage Insurance
Browse over 200 Free Mortgage TipsYour Complete Guide to UK Mortgages Find Out How to Win the Race to Buy Your Home - Home Buyers Guide Learn How to Save ££s by Remortgaging Read the Insider Info on Home Insurance Site Help |
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