Mortgage Redemption Charges

[Maggoty]

hi there. I had an amount of £44,600 owing on a mortgage. As the mortgage was over three years old and not liable to an early repayment penalty I decided to pay it off. However, in my ignorance I didn't realise that I had to pay a redemption charge. They have told me that that charge is £5K (well £21 short of £5K). Is that right? Over 10% of the actual mortgage!! I have until the 28th the pay it - after that there is interest to pay. Yikes!!
Thanking you in anticipation x

[rockyracoon]

You need to get out your mortgage contract, it should be written there wnat all the conditions and penalties are.

[Tilly2]

Just pay off £40,000 and leave the rest until the repayment date.

[Old_Geezer]

Wow. I had no extra charge when I used other savings that had matured to reduce my outstanding amount such that it finished soon after.

[ubasses]

Rocky is correct you need to go through all your Mortgage contract and associated paperwork. If you cannot find it in there return to the Bank and ask them on what authority are they charging you and challenge it in writing.
Tilly's answer would have been a good one as long as there were not any restrictions on lump sum reductions, some have a maximum amount in a given period but you are talking past tense so it looks too late for that.

[Old_Geezer]

Perhaps tell them that you weren't aware and ask for some back to keep it active.

[fiction-factory]

I can see why they do it because they are foregoing teh expected small profit on each interest payment every month for many years. Some allow you to repay up to 10% pa or similar without charge. Could you pay a smaller amount and avoid the charge

[Maggoty]

I've had the mortgage for other three years and it is out of its fixed term so in effect no early payment penalty. I have paid the amount and have now asked for all the paperwork, signed by me, that shows I agreed to it. Will wait and see if it is indeed my *** up :-).

Thank you guys for your help though

Alison