Redemption

Redemption has a strict legal definition and is the right of the mortgagor to recover mortgaged property on repayment of the loan and any interest due.

What this legalese means is that once you have finished repaying the loan you took out (the mortgage ), the property is yours and the lender has no further claim on it.

If you want to pay the mortgage off ahead of schedule, for example, to save yourself future interest payments you may face a penalty charge, known as a early repayment charge.

The lender may make this if the mortgage is paid off early to compensate them for the loss of interest they would otherwise have earned.

See Also: Mortgage Centre and Mortgage Comparison Service for the latest facts and figures.

Last Updated: February 2008 © Moneyextra.com

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