Article Treasure Cove

When you are considering a remortgage, there are a number of fees that lenders might not spell out as much as borrowers might like them to. They are always mentioned at some point and can eventually add up to quite a lot of cash. But remortgage tables in their basic form won’t spell them out. So when you are trying to compare mortgage loan rates through online charts, remember to delve more deeply to see what hidden penalties you might unearth in the small print.

To understand what these fees are going to end up costing you, it is worth either asking an independent financial advisor for assistance or at the very least get a detail of what the total repayments will be, including all charges.

Here’s some examples of what you might want to be on the look out for when trawling through the mortgage tables in search of mortgage interest rates.

Exit Fees – if you do not continue the mortgage to the end of its term and instead change it early then the lender may try to charge you an exit penalty to cover their administration costs that are involved in ending the mortgage. This may even be charged at the end of the mortgage whether it is paid off early or not. Previously these have been reasonable charges that don’t really add up to much in comparison with the figures involved in a mortgage, but some banks have hiked up these fees to try to make more money. This is taking advantage of the small print saying that charges can be raised and can result in incredible rises.

Standard Variable Rate – this is the standard mortgage rate that the lender will charge you once your introductory period is up. It is normally around a couple of percentage points above the standard base rate. This is where the building societies make their cash through those customers that don’t try to change mortgages when the introductory offer finishes. If you are on the standard variable rate and the tie in period is over, then it is high time to look at those remortgage charts.

Higher lending charge – gone are the days of the 125% mortgage, or at least until the lenders forget how badly they had their fingers burnt this time around. Most of the mortgage charts show the best buy deals and have various hoops to jump through, such as not lending more than 75% of your new home’s value. If you are borrowing more than the cutoff limit, then the bank may impose a higher lending charge.

Early redemption penalties – if you want to end your mortgage earlier than the offer or tie in period, there is usually an early redemption charge. This might be shown as an amount of cash or so many months’ interest. Quite often after the tracker or fixed rate ends there is a tie in period during which you cannot change from the standard variable rate without incurring this early redemption penalty.

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