how do you get out of a fixed rate mortgage without penalties

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  • how do you get out of a fixed rate mortgage without penalties
  • handbrake
    Member

    I could be saving quite a bit by gettiing out of my fixed rate(6.9%) mortgage, but my “bank” (Halifax) tell me that it’ll cost 2K or more and it’s not worth it as I’ll only save £1500 over the remaining period of the agreement.

    Any suggestions as to how I can wriggle out the penalty, and save me some dough???

    aleigh
    Member

    i doubt you’ll be able to wriggle out of a penalty as most fixed rates will have that written in the t&c’s

    GJP
    Member

    I would be very suprised if there is a way to wriggle out of it as it would be some loop hole that you would have thought the banks would have closed.

    Does smell a little of “having your cake and eating it” I’m afraid – one can only assume you took out a fixed rate for a good reason.

    I thought when you took out/renew a mortgage you are normally asked to sign something that covers the banks backside against mis-selling etc

    Steve-Austin
    Member

    Do you think if there was a way of doing it that the banks would have thought of it first and stopped anyone dong it!

    You are tied in to that contract, that you agreed to! 😆

    Premier Icon glenh
    Subscriber

    You signed a fixed rate presumably in case rates went up. If they go down you’ve got to ride with it unfortunately. The penalties are in the contract to stop people taking advantage of the deal if rates drop.

    bigsi
    Member

    You can’t.

    You signed up for it and it should have been explained to you what you were getting into so unless you can prove that it was missold and what you really wanted was a tracker/discounted/variable rate you are stuck with it unless you pay the penalties.

    Would you allow the lender to take away your fixed rate and put you on a tracker/discounted or variable rate if interest rates had gone up,,,, nope didn’t think so 😉

    Premier Icon chakaping
    Subscriber

    Just try to forget about it.

    It’s not money you could have saved, it’s the price you agreed.

    Smee
    Member

    Get proven to be insane and unfit to make a reasoned decision about your mortgage – that should do the trick.

    pk-ripper
    Member

    hand the keys to the house to the bank, and liquidate the loan. If the house value is greater than the value of the outstanding loan, then you’re out of the agreement.

    HOWEVER, the current projection of a saving of £1500 is based on interest rates at their current level. Depending on the rate it may fall to, you could potentially save sufficiently to warrant the change, but only if you change now as the £2k redemption fee is unlikely to change significantly. That has quite an element of risk (although the reality is that rates are likely to fall to virtually zero over the next 6 months), and the fact that you fixed at 6.9 suggests you are fairly risk averse.

    Premier Icon Capt. Kronos
    Subscriber

    Think yourself lucky – just paid over 4.5k myself. Sold the house, got humped on redemtion… though we may get a proportion of it back if we port the loan to a new house within 6 months (currenlty renting on a 6 month lease). The interest rate isn’t great, but 4k in my pocket or so (it will be pro-rate depending how much we take out again, which will be less than the original loan) is bloody tempting!

    Gary_M
    Member

    I was thinking about this the other day. I’ve got two properties and the mortgage on one is a tracker based on the standard variable rate. At the moment I’m paying buttons for the mortgage. The other mortgage is a fixed rate and if it was the same deal as the other one I’d be around £200 a month better off. But it’s just one of these things you have to accept I’m afraid, these are exceptional times.

    You could possibly call the bank and explain you can’t afford the mortgage ate the current rate due to a change in circumstances but to be honest I think you just have to accept that you can’t have it both ways.

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