Following the release of the Consumer Credit White Paper, the Consumers Association have called on the Government to force mortgage lenders to remove redemption penalties.
The White Paper includes a proposed law change to show how redemption penalties are calculated. Currently these favour lenders and are not always fair to consumers when paying off debts early such as loans, credit or mortgages.
Our view
Asking that Mortgage lenders remove redemption penalties is ridiculous. This may mean that lenders have to offer less competitive mortgage contracts. There are already thousands of mortgage plans around that have no redemption penalties - so why the fuss - people have choice now as to whether they want a penalty free or with penalties mortgage. The CA's call has no foundation!