|
|
Redemption penalty overhang |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Redemption penalty overhangThis 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 MatchesRedemption feeRedemption feeA fee some mutual funds charge when an investor sells shares within a specified short period of time. Redemption penaltiesRedemption 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. RedemptionRedemptionThe re-purchase of a security, such as a bond or preferred stock, by the issuing company at or before maturity. Redemption dateRedemption dateThe date on which a bond matures or is redeemed. Extended redemption penaltyExtended redemption penaltyThis 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. Further Suggestionsredemption priceRight of redemption Redemption charge Redemption statement gross redemption yield Redemption cushion redemption date Redemption Period Serial redemption right of redemption Redemption price Preferred equity redemption stock (PERC) Overhanging redemption penalty redemption fees Redemption Redemption Redemption redemption yield Mandatory redemption schedule |
|
|
|