stacey and jordan

Sold our house yesterday so now we are working out our money. I have a 2 year discount rate mortgage with Alliance Leicester . Just looking at my Mortgage offer and it says that if i make an early repayment within the first 2 years i have to pay charges of 3% on the money i owe them. Which works out to about £3500. I knew i would have to pay some charges but i didn't think they would be this much (got 9 months left). My last mortgage we had the % came down every month within the 2 years.
I'm going to phone them tomorrow to double check but knowing my luck this figure is probably correct. Oh and to top it off we will have to pay a admin fee of £295

Anyone else paid of there mortgage early with Alliance Leicester? or had to pay ridiculous charges!!!

From a not very happy Stacey

Tiggs+Graz

Hi Stacey
I would have said that the fixed fee for early repayment within your discount period was normal - both our current (First Direct) and our last (Woolwich) mortgage worked that way.
Can't remember for our last but when we signed our current mortgage the additional fees payable within the first two years were listed in the documentation.

Tiggs

JAJ

The way to avoid this problem is not to chase "discounts" in the first place, with respect. There are providers out there (maybe even Alliance Leicester) who will offer reasonable discounts without any lock-in however these are usually less spectacular than the "headline" discounts that get advertised.

No such thing as a free lunch etc.

Tiggs+Graz

there is no problem with getting a discounted mortgage deal - as long as you make sure you know what you are signing up for. We always use a mortgage broker who makes sure all fees etc are clear and specifically points out things that we need to be aware of.

Tiggs

sharonhartley

Hiya Stacey,

We have just sent main application off, but like you have looked into our mortgage and if we pay it off before april 08, we have about £11'000 penalty to pay , what a rip off!!!!, but do we stay the extra year here in uk god knows and hope not.

Good luck

Sharon & Phil

mand8002

We are not with the Alliance and Leicester but we also had to pay a charge for early repayment. This has reduced though each year and when we took the mortgage out we had no intention of selling the house but that is how things go sometimes.

angec

Unfortunately this is the same world over, my bank charged me an early repayment for actually borrowing MORE on my existing mortgage, (because it was a discounted mortgage apparently). I understandably thought that they would be better off for us borrowing more money from them at what was infact a slightly higher interest rate. This fee went entirely unmentioned at the time I was arranging for the remortgage. I'm still waiting six months later for the promised breakdown of what the $1200 fee consists of.

Definately wise to read the small print!

Antney

We had the same thing with Halifax when we sold. Why don't you look into remortgaging with Alliance and Leicester, but just move on a variable rate. As your not moving the mortage away from them you should have to pay the charges. Then with a variable rate mortgage you don't usually get locked in with penalties and you can just sell and move on with your life down under.

gjs

[QUOTE=stacey and jordan]
Anyone else paid of there mortgage early with Alliance Leicester? or had to pay ridiculous charges!!!
This happened to us too.we used a mortgage broker and specified that we didn't want any early repayment charges -we didn't check the (very)small and not clearly worded small print and ended up forking out £3k,as we had 11 months to go before there was no penalty to pay.We are just starting to look at mortgages here and could use that cash to help pay the high interest rates.After paying less than 3% it's a real shock to see quotes of 7% over 30 years!

wmoore

Ours was with Northern Rock and we had something similar. We remortgaged a few years ago to change to repayment only (because of an under-sold endowment by a third-party ) so we had to pay some ridiculous amount for an early-repayment fee. Even though we knew it was coming it's painful isn't it?

angec

[QUOTE=gjs] It is a little scary, a little bit of advice though, if you pay fortnightly it brings it down to lower than the 25 years straight off. And as most seem to be paid fortnightly here it's easier to keep track of, and if you chuck even a little bit extra onto it each time it brings your time down again.(beware of fees to change your amount though)

I can't advise which is best, as as you could see from my above, ours haven't been wonderful and I'll probably move myself, once I've sure they won't get any more money out of me for doing so.

brisnick

Have you thought at continuing to pay the mortgage for the remainder of the term? I don't know if you can do this as I've never been able to afford to buy. But, if you get a lump sum of say £100,000, and owe £50,000, can you not keep all £100K and pay the monthly repayments until you have fulfilled the early payment bit. Sure, you end up paying interest, but does it work out less than the fees for early repayment?

Tiggs+Graz

Your house is the collateral for your mortgage - you CANNOT sell your house without paying back the outstanding mortgage at time of sale!

brisnick

Well there you go. Learn something new every day!

shorrock

Why not rent your property out until April 08

Renting it out seems to have some good advantage

1) No early repayment fee
2) Property price could go up
3) If you change your mind about the move you haven't lost your property. I know you may be thinking "I'm NEVER going to leave AUS". Just look at the Moving back to UK forum.
4) Stops you buying in AUS, until you know the area you want to live in. Could be good could be bad.