Redemption figures

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Peachie

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I'm currently changing mortgage companies. I took out my current mortgage 2 years ago - it's for 635k over 35 years, fixed rate 4.69% but paying interest only. I sought redemption figures in Dec and was quoted 639.979e. Getting nearer to sealing the deal with the second bank now so sought the up to date redemption figure - it has now soared to 645,711e!!!!!!!! Almost a 6k difference in a month!!! Does this sound right?? I spoke with a person in the redemtions dept - she told me a standard equation is used to calculate the figure and the huge increase is due to the 2 ECB drops since Dec. I know if I wait til the end of my fixed rate agreement (Oct 09) I won't have to pay the "break fund fee". But al the paperwork is done now, solicitor engaged etc so waiing will end up costing.... Does this huge increase sound correct??

TIA.
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The figure that has risen id the penalty for breaking out of the fixed rate. So they are charging you 10k to leave the fixed rate. Is it really going to be worth it? If you hang on till October you will just owe the original 635k. What rate is the new mortgage going to be? Will you save 10k in repayments before October? . (Also there will probably be legal fees to switch.) Who is the current lender? If you hang on till October you could get a good rate from them.
 
Not sure if I can name banks here??? Current lender K**. New lender is A**. New rate is 3.25% New lender is paying all the switching fees. Also mort protection much cheaper for new loan - first bank insisted we insure 110% of loan as we were paying interest only. also pyschologically now want to start paying off capital (can't afford this on current rate)...and also want to break ties with first bank! also if we wait til oct, house price may drop more so 2nd bank may not be able to lend us full amt based on loan to value ratio. so all in all, i take your point but will prob go ahead and move anyway. was just v frustrated re the huge hike in 1 month! thanks though!!
 
Hi Peachie,
I suspect I am about to do the same as you with the same two banks. I just had advice on this an hour ago and could share info with you if you wish?
Fostra
 
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