The Times - Mortgage rates and energy costs are rising: should you become an early quitter?
Households are choosing to pay penalties to break out of mortgage, savings and energy fixes early to take advantage of better deals while they last.
One mortgage holder using the broker Trinity Financial paid a £27,000 penalty to switch his £985,000 loan from a two-year deal at 1.87 per cent with Barclays to a seven-year fix with the same bank at 2.36 per cent. His deal had been due to end in August. His monthly payments have gone from £3,510 to £3,990.
Another Trinity customer paid an £18,000 penalty to switch deals early.
Aaron Strutt from the broker said: “There is no doubt the base rate hikes have pushed many borrowers to act. House prices have increased so much that many are not worried about paying chunky early repayment charges to ensure low monthly repayments. They may use the equity they have built up to borrow more to pay the fees.”
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