Early repayment charges on a mortgage

Robert George, 42, a HGV driver from Cardiff, wanted the best mortgage advice possible in order to find a competitive flexible mortgage and so consulted L&C Mortgages. Robert was locked in to a high 6% interest rate with his current mortgage lender, Northern Rock, with a whopping £3,500 early repayment charge in order to get out. His mortgage of £93,000 was costing him £555.00 a month, on a split repayment/interest only basis.

By switching to an L&C exclusive tracker mortgage with A&L, set at 0.05% below the Bank of England base rate for 2 years, Robert took 2.3% off his interest rate. Had he ridden out his time with Northern Rock for another 3 years and 4 months, Robert would have paid out an extra £5,215!

He has more than saved back the early repayment charge. The savings were not the best part of the deal from Robert’s point of view, however. Based on his previous experience, Robert enjoyed the flexibility and freedom of his new mortgage.

Says Robert: "With this mortgage there are no early repayment charges at any time. That means I can switch again whenever I want, which could be very useful."

See also: early repayment mortgage calculator