Mortgage penalty clause/lock ins
A mortgage penalty clause, also known as a 'lock in', is a charge that lenders attach to loans secured against the value of a property.
Typically, mortgage penalty clauses come into effect if the mortgage-holder attempts to pay back their mortgage early.
They often apply to fixed rate and discounted rate mortgages, to discourage mortgage-holders from taking out a cheap deal and then moving lender as soon as a cheaper deal becomes available.
The mortgage penalty clause/lock in is generally in force for as long as the discounted period or fixed rate period. After this has expired borrowers are typically free to move to another provider without incurring charges.
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