Redemption penaltiesCharges paid to the lender in compensation for lost interest if you redeem your mortgage ahead of schedule. During a discount period you will be severely penalised if you try to switch to another product or mortgage provider. Penalties can be stepped just like discounts, and can be particularly severe within the first year. This is to ensure that the costs that the lender endures in setting up the mortgage are always covered. Penalties can be a fixed sum of money, though are often proportion of the loan. With cashback mortgages, you often have to repay the amount of money you received as cashback.
This is the right of the mortgagor to recover mortgaged property on repayment of the loan and any interest due. This legally means that once you as the borrower have finished repaying the mortgage you took out, the property is yours and the lender has no further claim on it. If you pay of the mortgage ahead of schedule you may face a redemption penalty which compensates the lender for loss of interest.
Redemption cushionRedemption cushion
The percentage by which the conversion value of a convertible security exceeds the redemption price (strike price).
Redemption PeriodRedemption Period
A time period during which a mortgage, landcontract, deed of trust, etc., can be redeemed. Usually set by statute, and after judicial foreclosure.
Gross redemption yieldGross redemption yield
See 'redemption yield'.
Mandatory redemption scheduleMandatory redemption schedule
Schedule according to which bond sinking fund payments must be made.
Further SuggestionsRedemption fee
Overhanging redemption penalty
Right of redemption
right of redemption
Extended redemption penalty
Preferred equity redemption stock (PERC)
Redemption penalty overhang