Is ERC charged every time overpayment is made?

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SuzieGirl
SuzieGirl Posts: 39 Forumite
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in Mortgages & endowments
Hi all

I have worked out that paying a large lump sum off my mortgage now will be worth paying the ERC rather than keeping it in the bank.

What I want to know is, if I decided to pay another overpayment or even remortgage elsewhere during my current mortgage deal will I pay the ERC again?

Thanks for your advice

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  • glosoli
    glosoli Posts: 739 Forumite
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    If an early repayment charge is applicable then it will be a percentage of the amount you pay off, so for example if the early repayment charge is 3% and you paid off £10,000, your erc would be £300, and then if you made the same payment in 6 months then again it will be another £300.

    Out of curiosity would you mind posting your figures? i.e balance, interest rate, erc, and the amount your paying off?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Maybe worth timing the over payments to avoid paying the ERC.
  • SuzieGirl
    SuzieGirl Posts: 39 Forumite
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    glosoli wrote: »
    If an early repayment charge is applicable then it will be a percentage of the amount you pay off, so for example if the early repayment charge is 3% and you paid off £10,000, your erc would be £300, and then if you made the same payment in 6 months then again it will be another £300.

    Out of curiosity would you mind posting your figures? i.e balance, interest rate, erc, and the amount your paying off?

    Mortgage £98,000
    Interest 3.39% with just over 2 years to go on my 5 yr deal
    17 years left on my mortgage term
    Currently paying £635 ish per month
    ERC is 3% now and 2% after 31st March
    I have £40000 lump sum

    I thought I would pay the maximum allowed this year now which is £9800 and the rest after 31st March.

    The reason for the lump sum is from my pension as I took early retirement because of ill health. I need to reduce my monthly outgoings and also not have too much in savings as I may need to claim benefits. My annual income is being reduced by around £4000 per year.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    £40k will last you over 10years of reduced income..

    if planning to claim means tested benefits consider the deprivation rules.
  • dimbo61
    dimbo61 Posts: 13,716 Forumite
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    You are not claiming benefits yet so if you want to pay 10% off your mortgage before the end of march that is your business
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