A Redemption Penalty (also known as an Early Redemption Penalty) is a fee charged by a lender if you repay a loan or mortgage earlier than the agreed term. For mortgages, this cannot be more than the figure agreed in the mortgage agreement.

How much is the penalty for paying off a mortgage early?

This varies depending on your overall mortgage and the percentage set by your mortgage lender.

How can I avoid early redemption penalties?

Mortgage products without early redemption charges are available from some lenders, or alternatively you can wait until the end date of penalty’s eligibility.

Are there any advantages?

If you get a good deal on a new mortgage, then you may well find that the cost of a redemption penalty is offset by the savings of a good rate.