Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 08/11/2019

Analysis from Moneyfacts.co.uk shows the average mortgage redemption fee has increased by 9.3% over the past year, from £107 to £117. The maximum fee currently being charged to end a mortgage loan is £400, an increase of £175 on the highest fee of £225 last year.

While the average increase in fee of £10 may not be material, the significant increase to the maximum fee charged could see other lenders start to up their fees and fall into line.    

Average mortgage redemption fee analysis

Date

Average redemption fee

Maximum redemption fee

% change to average fee (year-on-year)

1/11/2009

£111

£275

Not applicable

1/11/2014

£115

£300

+3.6%

1/11/2018

£107

£225

-7%

6/11/2019

£117

£400

+9.3%

Source: Moneyfacts.co.uk, based on a panel of between 83 to 86 lenders.

How to avoid a mortgage redemption fee

Borrowers concerned about paying a fee at the end of their mortgage could consider selecting a lender who doesn’t charge a redemption fee or look for a variable rate mortgage, as around a third of these don’t usually charge to redeem a mortgage. (Our research from September 2019 showed that out of 842 variable rate mortgages, 279 did not charge a fee.)

Halifax, HSBC, Lloyds Bank, NatWest and Royal Bank of Scotland are the only lenders who have consistently not charged a redemption fee in 2009, 2014, 2018 and this year. In 2019, there were also five other lenders that did not charge redemption fees: Bank of Ireland for Intermediaries, Atom Bank, M&S Bank, Reliance Bank and TSB.

How to avoid a mortgage redemption fee

Borrowers should check the information sent to them from their lender about mortgage fees. Whenever a lender changes its fees, it should send a communication to its affected customers. Those with a mortgage that is due to end soon should look particularly closely to avoid an unexpected fee.

More information can be found in our what are mortgage redemption fees guide.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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