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

Preferred equity redemption stock (PERC)

Preferred equity redemption stock (PERC)

Preferred stock that converts automatically into equity at a stated date. A limit is placed on the value of the shares the investor receives.


Redemption

Redemption

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 fees

Redemption fees

Fees imposed by a mutual fund on shareholders who dispose of shares within a relatively short period after purchase.


Redemption fee

Redemption fee

A fee some mutual funds charge when an investor sells shares within a specified short period of time.


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

Serial redemption
redemption
Right of redemption
Redemption price
gross redemption yield
Redemption Period
redemption price
Redemption charge
Redemption cushion
redemption yield
redemption date
Redemption
Mandatory redemption schedule
Overhanging redemption penalty
Redemption
right of redemption
Redemption date
Redemption statement
Extended redemption penalty


 
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