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What Exactly is a Mortgage?: A mortgage is basically a loan – a loan that is secured on the value of a property which you pay back over a given period of time.
Interest Rates Explained: APR is used to identify the true cost of borrowing and to provide you with a method of comparing the true costs of a loan.
What Happens If I Can’t Keep Up My Repayments?: It is very important that if you are having problems meeting your mortgage repayments, you talk to your mortgage lender straight away.
What is a Fixed Rate Mortgage?: A loan where the initial payments are based on a certain interest rate for a stated period and the rate payable will not change during that period regardless of changes in the lender's standard variable rate.
What Are Flexible Mortgages?: Generally, people rebroke their mortgage deal once every five or six years. They also may change their mortgage lender at the end of a discounted or fixed period. Chances are in that in the time between their last remortgage, the mortgage market will have changed a great deal.

What Are Redemption Penalties?

Redemption penalties are your lender’s way of getting extra money out of you when you decide to cancel your mortgage agreement early.

All fixed rate mortgages penalise borrowers with redemption penalties, but usually only for the duration of the introductory period. Once that period, which could last anything from one to five years, is over then you are normally free to find another mortgage lender without facing any charges from the existing lender. Make sure you check up on this before you sign an agreement however, as some lenders charge an overhanging redemption penalty, this is where the redemption penalty still applies after the introductory period is over.

The redemption penalty is usually expressed as a percentage of the mortgage total – this could range from 1% - 5% of the total amount borrowed, depending on what stage of the mortgage term you are at when you cancel the agreement.

The only types of mortgage that do not charge redemption penalties are flexible, current account and offset mortgages. If you would like the freedom to end your mortgage agreement whenever you choose, these would be the best mortgages for you.

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