Redemption penalty overhang

 

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Redemption penalty overhang

This is where the redemption penalty continues beyond a fixed or capped rate period, effectively tying you in to the much higher variable rate for a period of time after the fixed or capped period. As a result you get stuck paying an uncompetitive rate that eats into the gains you may have made from having the fixed rate or capped ratein the first place.



Redemption penalty overhang

Similar Matches

Mandatory redemption schedule

Mandatory redemption schedule

Schedule according to which bond sinking fund payments must be made.


Redemption Period

Redemption Period

A time period during which a mortgage, landcontract, deed of trust, etc., can be redeemed. Usually set by statute, and after judicial foreclosure.


Redemption

Redemption

The re-purchase of a security, such as a bond or preferred stock, by the issuing company at or before maturity.


Redemption date

Redemption date

The actual date on which repayment of a bond or loan stock takes place.


Redemption penalties

Redemption penalties

Charges 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.


Further Suggestions

Redemption
gross redemption yield
Redemption price
Redemption
Preferred equity redemption stock (PERC)
Redemption statement
Redemption fee
right of redemption
redemption price
redemption fees
Redemption cushion
redemption yield
Extended redemption penalty
Right of redemption
Redemption
Redemption date
Serial redemption
Overhanging redemption penalty
Redemption charge


 
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