This is my first time refinancing. I would like to find out from you all one thing.

I recently am refinancing my home loan with HSBC (previously Alliance Bank). I'm out of the lock-in period already (more than 5yrs). But Alliance bank is still charging me redemption fees + contingency fees (total 7k). I though the redemption fees/penalty is only applicable when I refinance or settle within the lockin period.

Guess my question is, can they charge me these fees? Because I didn't read anything about it in the loan agreement.

i think the fee you are referring to is "early penalty fee", which could be different from redemption fees+contingency fees

Oh, so when we refinance, redemption fees will always be charged? How does the bank determine the redemption fees? Because it seems the redemption fees are almost the same as the "early penalty fee".

Attached is the letter that I received. What i feel is unfair is that they mention that "we reserve the right to change the redemption sum due to variation of interest rate or other incidental charges".



This post has been edited by whypurplishblue: May 27 2010, 10:40 AM

call them up and look for mortgage specialist from thier bank, ask them whats this redemption fee for, considering that is already over the lock in period, I dunno does this apply to malaysia's bank, but in singapore, there is a thing called "clawback" even though ur mortgage is no longer locked in, clawback will be imposed basically to charge back on whatever legal subsidy, valuation fee, insurance that the bank pays for your property after approving your loan. maybe in ur case, the redemption refer to this.

Sorry as i only do singapores mortgage and above information is 100% right for mortgages in SG. but no matter what, dun pay blindly. find out from teh bank what are they charging u since lock-in is over.

emmm...it is redemption sum, meaning the balance of the loan, which is dependent on the interest rate and different from "redemption fee"?

Thanks for that, I have called the bank up and they have told me that i was still within the lock-in period. They mentioned my lock-in period was 7 years. I have only been servicing the loan for only 6 years. Before I refinanced my property, I called up my home branch and was told that I was out of my lockin period. Unfortunately, I blindly trusted this lady and went ahead with the refinancing. Now after they double check the document, they told me that actually there is a clause that says that first 3 yrs fixed interest rate then 4yrs after the fixed interest rate my lockin will end. ie. 3 + 4 =7 years.

As a consolation, I was told that I can appeal the redemption fee to get a discount. As a precaution I am getting my lawyer to read through the letter of offer to see if there is anything else I can do.

while waiting for the lawyer, if u dun mind the hassle, called in to their CS hotline, lodge a complaint(in a timely manner) and ask them to escalate it to customer care unit(CCU team), inform them that the reason y u did a refinance is becoz thier staff told u that the lock-in period for ur mortgage is 3 years and hence, u proceed to refinance it. Tell them that if possible, please waive of the redemption as it is not ur fault for doing refinance after being told by teh bank staff that you're out from lock-in(common-sensely, u wouldnt do a refinance if u noe theres penalty on it right? unless, really, u r saving dam alot until u think that the redemption is worth to paid).

u might stand a chance of waiving all of the redemption but u might affect the officer's(who gave u the wrg info) career. Its up to you.

They can deny anything which is not black & white.

That's why i insisted my mortgage loan agent and developer must reply everything in email for the question i asked.
or i summarized whatever they told, explained over the phone in email and asked them to acknowledge it.

but still alot of fees\insurance pop out from nowhere just days before signing on loan agreement.

Good advice! I shall do that! In regards to the officer's career, they shouldn't be put in that position if they give wrong information to their customers.

Thanks Lucas.

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Added on May 27, 2010, 4:26 pmYour right about that. We have to be more cautious next time. I wasn't told about a lot of things when I was refinancing. All they say pay lawyer fees and admin charges. End up got more and more things crop up.

This post has been edited by whypurplishblue: May 27 2010, 04:26 PM