What is a redemption statement?
A mortgage redemption statement is a document that shows the amount of money a borrower needs to pay in order to fully pay off their mortgage – whether because they’re remortgaging with another lender, moving home, or simply paying off their mortgage.
The redemption statement includes the capital balance of the mortgage, any fees that the borrower will need to pay when redeeming their mortgage, and the total interest charges up to the redemption date.
Sometimes, a redemption statement can show a higher amount owing than the value of your total loan. To learn why this happens, more information can be found below.
I’m redeeming my mortgage with you. When do I cancel my Direct Debit?
When you redeem your mortgage, we’ll cancel your scheduled payments once your account has been fully settled.
Once we’ve received all the funds we need and refunded you any overage, we’ll send you a confirmation of your redemption. Then you can cancel your Direct Debit.
If you cancel your Direct Debit early, we may not be able to settle the mortgage or refund any overages by your chosen redemption date.
Are there any fees to redeem my mortgage?
We charge a £50 exit fee which covers all administrative work carried out when you redeem your mortgage. Please check our tariff of charges for more information here.
If you’re redeeming part or all of your mortgage during a fixed interest term, you’ll probably have to pay Early Repayment Charges (ERCs). There typically aren’t any ERCs to pay if you’re on our Standard Variable Rate (SVR) or if you’re at the end of a fixed interest term.
You can learn if these charges apply to you in your mortgage offer. If you’d like to learn how much you’d owe in ERCs if you redeemed today, just reach out to us via webchat.
Why is the figure on my redemption statement higher than my current outstanding loan with you?
Depending on the date you choose to redeem your mortgage on, there may be outstanding amounts owed on your mortgage, like the interest that accrues between the start of your final payment period and the date of your redemption.
If this occurs, we’ll add the outstanding payments to the total amount you have to pay us to settle your account. This will be listed in the “Interest Balance” line on your redemption statement.
We request this money as part of your total redemption figure to make sure we’ve got all the funds required to fully settle your mortgage on your chosen redemption date.
If we don’t have all the funds in place, it could mean that your redemption is delayed or can’t take place, and this can impact other plans you might have, like remortgaging elsewhere.
If we owe you any money once the redemption has settled, we’ll refund this to you within 10 working days.
There’s also our £50 exit fee, which is included on your redemption statement – this means that your redemption figure will vary by at least £50 from your outstanding mortgage balance.
Example of a redemption statement: