Redemption

Redemption refers to the full repayment of a loan or mortgage, effectively ending the credit agreement and releasing any security held by the lender. On redemption, the lender must remove any charges registered at HM Land Registry (for property) or Companies House (for debentures) within a specified timeframe.

For bridging loans and commercial mortgages, a redemption statement is issued by the lender on request, showing the exact amount required to fully repay the facility on a given date (including accrued interest, any exit fees, and legal costs). This is used by solicitors to ensure precise settlement at completion.

Early redemption (repaying before the end of the agreed term) may trigger early repayment charges (ERCs) or exit fees. Always check these charges before redeeming early - for some facilities the cost of early redemption may outweigh the interest savings.

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