Financially,
Christmas can be gruelling.
Buying presents and feeding the family can overstretch the bank balance, especially if
mortgage repayments are due as well. Many employees in the UK can only remain comfortable over the Christmas period through Christmas bonuses. The sudden
financial freedom of a larger-than-expected Christmas bonus can lead to the temptation to overpay one’s mortgage. However, experts are warning UK
mortgage holders to be aware that a Christmas overpayment could see them hit with heavy charges.
One firm of independent
property analysts warns that residents of the UK may face high fines if they try to overpay in one
lump sum this Christmas. The charges, known in the mortgage trade as ‘redemption’, may be levied at people trying to settle larger than usual payments on their debt. Mortgage customers are advised to consider the early redemption charges that apply to their mortgage policy. The amount will vary between
lenders and between policies. Some will allow 5%, others 10%, whereas some may allow unlimited overpayment. Going above the agreed rate is perceived as a breach of the terms of the contract, and as such could lead to large early redemption charges.
Mortgage customers strugglinh with
debt, or the scale of their
loan, are advised that a
remortgage could possibly make their
mortgages more affordable.
