Click advocates secured loans
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Click says that in certain cases mortgage holders should bypass redemption charges and opt for a secured loan in order to free up capital before their fixed term mortgage is up.
Steve Teague, chief executive of Click, says: “Every month, thousands of borrowers sign up to deals typically lasting anywhere between two and five years – but should they wish to free up additional capital before the deal is up, some may face horrendous fees from their current mortgage lender if they need to switch.
“Arranging a secured loan can make better financial sense for certain individuals needing to borrow more money - they won’t face any penalties or lose their mortgage deals.
"These can be people whose circumstances have changed and those where additional funds cannot be provided by the current lender."
Teague adds: “It’s a good deal for the broker in terms of the commission we pay and a good deal for the client, as they get their money more quickly and without the need for expensive early repayment fees and the like.
“Secured loans can be arranged from as little as 6.5%, depending on the client’s credit score, amount of loan and length of time the loan is taken over.
“Compare this with the cost of taking out a standard variable rate mortgage at current rates, arrangement fees and exit penalties to get out of the old deal, and it can be a win win situation for both broker and client.”
