Would a mortgage company charge a fee if we wanted to pay off our mortgage before 2yr disc rate ends?

Question

We have a mortgage with the Halifax which has a 2 year discounted rate which we took out in May 2006. If we wanted to sell our house now would we have to pay a 'fine' to the Halifax for ending the mortgage before the 2 year rate has come to an end? Thanks for your help.

Answer 1

Yes they would I'm afraid, unless you are buying another home in which case they transfer the remaining time to the new mortgage if you use the same lender. The amount you are penalised will be less as time goes on, it reduces every month, so you will pay less than the penalty stated on your agreement now than you would have done in, say, June or July. If you are considering another lender, there are instances where it is is worth paying the penalty to get a better deal, so it is worth considering. Hope this is of some help.

Answer 2

Below is taken from the Halifax website in their FAQ about mortgages. In effect they may, I think it would depend how long you have got to until the end of this discounted part

Are there any early repayment charges on my existing mortgage?
If you have a Fixed or Tracker Rate Mortgage and are still within the fixed rate or the tracker rate period then there may be an early repayment charge if you repay the mortgage within this time.

To find out about any charges that would be payable on your specific mortgage, call 08451 20 55 56. Lines are open 8am to 8pm Monday to Friday, and 9am to 4pm on Saturdays.

Answer 3

You really need to give the Halifax a ring or look at your offer. Some discounted rates dont have a redemption penalty. If there is a penalty and you are buying a new property you could take your current rate with you and not incur any penalties. I would recommend that you talk to an independent mortgage advise. I use www.moneyfax.biz. Nice man

Answer 4

its funny to me how some of these people answer questions having no idea what they are talking about. To be added to title/deed it is simple but does cost some money my advise would be have the title company who he last worked with if he knows who this was if not any title company can do it but may give a discount if they have previously worked with him. Have a quit claim deed written up and it needs to be signed, notarized by him and recorded with the county. Recording fees cost per page so it depends on what county you live in. standard est fee amount would be 30-40 dollars for recording a quit claim deed(thats what I paid when I divorced) and the cost to have it drawn up can cost anywhere from 25-200 dollars if you go to a attorney they will charge a lot more of course just like anything else. I wouldn't trust a real estate office like someone said on here because if it does not have the correct verbiage it could be rejected which is why a title company(who has a title attorney they work with) or a attorney can ensure the correct verbiage is on the quit claim.

Answer 5

That's all spelled out in your mortgage contract. Discount mortgages typically do have a pre-payment penalty, usually linked to how long you have held the mortgage. Any pre-payment penalty will normally reduce your gain on the sale so you'd pay a bit less tax if the gain is taxable.

Answer 6

yes. probably a couple of hundred pounds but it can go up to over a thousand! it will say exactly how much on your mortgage contract or phone the company and ask.

Answer 7

Highly likely - read your mortgage agreement or give them a call

Answer 8

They loan you money cheap because they know you'll over pay in the long term. So if you cop out, they re-coup that money as a penalty.
Learn this early in life: You NEVER get anything for free.

Answer 9

yes unless you purchase new house with same mortgage company

Answer 10

It depends on how the mortgage was written.