If you go to an independent mortgage adviser like Mortgage Required who are not restricted to just one lender, then you will see lots of different mortgages, all with different terms. Some have a low starting rate of interest, some low arrangement fees. Others will have capped or fixed rates of interest for 2, 3 5 or even 10 years. The choice can be confusing.

It’s important to consider things like how long you expect to stay at the property, whether you are likely to want to re-mortgage any time soon and what you expect to happen to interest rates in the short and medium terms.

This is important because when a lender offers you a low initial rate of interest or an amazing fixed rate for say two or five years, they are is doing so on the assumption that you will not change mortgage within an agreed period of time.

This is the “tie in period” If you do, then the mortgage agreement will probably set out a variety of penalties and fees that you will be required to pay. The fee amount will vary but the period during which such a fee may be charged is sometimes referred to as the ‘tie-in period’. The fee is usually referred to as an ‘early redemption penalty’.

In most cases, if a fixed or capped rate of interest is for 3 years then the tie-in period is likely to reflect this.

Contact us on 01628 507477 for more information or to speak to a mortgage adviser.

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