Switching mortgage product costs? henrygregory

#1
Hello,



I am looking at buying my first house. The asking price is £380,000 and I have £55,000 for a deposit.

This gives a LTV of 86%.



I was hoping to get a fixed mortgage product for either 3 or 5 years.



As an example, for the three year products, it says initial rate of 2.49% which would be £1160.21 for 36 months and then 5.34% svr which would be much more per month.

My question is, after the 36 months, are we able to shop around and find products from other providers which may be lower than 3.6% and if so, what sort of financial penalty would there be?



Is this what is called a mortgage exit fee?

#2
There generally isn't a mortgage exit fee payable once you have reached the end of your fixed term.



There is often a fee to take out a mortgage with the new lender, though.



You'll also be given the option to re-fix with your current lender, which will be cheaper than the SVR.

#3
Generally there is a "mortgage exit fee" or a "security release fee" applicable no matter when you pay off the mortgage, whether this be in 25 years time at the end of your mortgage term or in 3 years if you moved lender, and covers the cost of the lender discharging the security.



So as long as you moved lender once the ERC period expired, your redemption figure will basically be made up of the capital balance, any interest accrued up until that point during the month (i.e if your interest is applied on 1st of every month, and you paid it off on the 20th, there would be 20 days interest to pay), and the security release fee of the low £100s.

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