Mortgage Redemption Fee

[ImLadybird]

Hi, desperate for answers cos I'm panicking now and can't call the bank until the morning.
We have a mortgage that was with the Woolwich but Barclays took over. We got divorced a few years ago and finally got round to selling the house. I thought there might be an early redemption fee when we pay off the mortgage of like £200 or £300, but someone said it can be 6% of loan which is over £8,000. Fuck!
Anybody have a clue?

By the sound of it you have had your mortgage for many years so this is unlikely to apply to you. Usually applies to fixed rate mortgages during the period that you tied the mortgage up to a certain rate. You should be fine if that's not the case.

We re mortgaged 10 years ago but have 5 years remaining and it's a variable rate. So you think I'm ok?

They usually taper and then run out. They don't last the whole of the mortgage usually.

And not all mortgages have redemption penalties these days anyway (they were deemed unlawful to run the whole of the mortgage so can only run for any 'deal' period now).
There will be an admin fee of c£200 which might be what you are thinking of.

If it was fixed rate you'd be more likely to have one, variable rate less likely. Can't you look it up on the paperwork?

I think you're muddling two different charges.

A mortgage redemption fee is a few hundred and paid when you pay off the mortgage, it's a fee for the admin required when you repay the mortgage.

There's also a fee called an early repayment charge. This is something different and, as Red has said, is usually on fixed rate mortgages for the period of the fix.

You'll need to find your mortgage paperwork to check if this applies.

Ok, that's given me some hope. I can sleep and call the bank in the morning! Thank you!

No don't worry - it's only if you have a fixed
Mortgage - you're on variable so it's fine

The big redemption fees are usually for fixed rate deals to stop you jumping ship if a better rate comes along, you should be fine.

I'm away atm. Home tomorrow. But it's definitely a variable rate mortgage we have at something ridiculously low like .25% above the base rate.

Phew! Had a scary half hour when I thought I'd have to pay £8,000! Thank you all!