Early repayment of a fixed rate mortgage can be costly.
For mortgage-holders looking to switch from a fixed rate mortgage, early repayment can work out costly.
Most home-owners who chose a fixed rate mortgage deal tend to focus more on the mortgage rate and arrangement fee, often forgetting to consider early repayment charges. Most mortgage-holders don't expect to pay their deal off in advance so such charges tend to not be considered.
Latest Moneynet research reveals that it is equally important to check early repayment costs charged for terminating a mortgage deal ahead of time.
Not everyone comes into a windfall to clear their mortgage debt, many just want to remortgage to switch to a cheaper deal or move house, but with potentially high termination fees this can prove difficult.
Some lenders can charge as much as 5 per cent to quit a deal during the first year. This figure may gradually reduce each year until the end of the fixed rate term when the outstanding sum can be repaid penalty fee.
Most of you with a fixed deal are unlikely to switch in your first year but towards the final year or so you should be considering your options. Here difference in lenders early repayment charges become important therefore it pays to take this into account when initially fixing a deal.
When shopping around for a fixed rate mortgage deal it pays to contact an impartial 'whole of market' broker such as Deal Direct. Our advisers can compare the most competitive mortgage rates and low early repayment charges on offer.
Contact Deal Direct today for the best mortgage rates on offer.
