I've been offered a mortgage with an extended redemption penalty. It seems like a great deal - should I go for it?

I've been offered a mortgage with an extended redemption penalty. It seems like a great deal - should I go for it?

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The short answer is that the extended redemption penalty is not a good deal. If it looks too good to be true, it normally is, and that will certainly be the case here. The catch will be for an exchange of a really low interest rate for an initial period, probably two years, you'll be stuck with paying a very high rate for several years thereafter. If you do want to redeem the mortgage or pay it back early during that period, you'll be caught by having to pay the lender a high early payment charge which will more than wipe out the benefits that you had from that cheap mortgage rate initially.