Lenders Waiving Early Redemption Charges

For many, their mortgage has been a loan in which they have been tied into, unable to afford the redemption charges involved to allow them to shop elsewhere and get a better deal. Not only have the redemption charges prevented consumers from saving money on their existing mortgages, it has also prevented them from consolidating their debts. If the interest rates on an existing mortgage are comparable to or higher than the rates on their debts, there’s little point on considering debt consolidation of this sort. However, in the light of the recent credit crunch, the tables have turned in favour of the consumer.

In an unparalleled chain of events, many lenders have actually been offering sweeteners to the consumer to encourage them to take remortgages with other companies. These have taken many forms, but the one that could have the most impact is the waiving of redemption charges. One such lender is the Bristol and West. According to the Telegraph, they have written to 140,000 borrowers offering to waive redemption charges in the event that they want to take their business elsewhere. The offer is being made to borrowers on fixed rates of various lengths such as two, three and five years, but all are due to expire within 13 months, a spokesman said. Northern Rock, a well known mortgage provider has been known to also offer this option to their borrowers.

For anyone considering shopping around for a new lender, it seems that there couldn’t be a better time. With no redemption charges to pay and some lenders, such as the GMAC, even offering to pay off a portion of the loan, a remortgage could become a happy reality for many consumers, and the solution to reducing overall debts.