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    • clairecymru
    • By clairecymru 16th Oct 16, 11:46 PM
    • 472Posts
    • 2,644Thanks
    Should I pay ERC to get a better rate?
    • #1
    • 16th Oct 16, 11:46 PM
    Should I pay ERC to get a better rate? 16th Oct 16 at 11:46 PM
    I have 10 months remaining in my fixed rate mortgage. I took out a 95% mortgage over 29 years with an interest rate of 5.01%. My ERC is £2,500.

    Based on current property sales nearby my home is worth £100,000. I owe £78,000 on the mortgage.

    Looking a current mortgage rates for 80% LTV I could knock £100 a month off my mortgage or pay what I am currently paying but knock 7 years off the term.

    Am I better off paying ERC to get better rate or just sticking out for another 10 months until my fixed term ends.
    Hoping and Praying for that ITV win!
Page 1
    • Thrugelmir
    • By Thrugelmir 16th Oct 16, 11:48 PM
    • 54,402 Posts
    • 47,247 Thanks
    • #2
    • 16th Oct 16, 11:48 PM
    • #2
    • 16th Oct 16, 11:48 PM
    10 months saving at £100 = £1,000.

    ERC = £2,500 Plus costs of remortgaging.

    On the face of it no saving. If you can afford to overpay the mortgage by whatever you can. That will save you money and improve your LTV quicker.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • getmore4less
    • By getmore4less 17th Oct 16, 6:24 AM
    • 29,173 Posts
    • 17,454 Thanks
    • #3
    • 17th Oct 16, 6:24 AM
    • #3
    • 17th Oct 16, 6:24 AM
    Add the fees make the payment the same and see whats left in 10 months

    £78k 5.01% lets say you are paying around £450pm now.

    adding £2500 you need a rate of 1.1% or better to break even in 10 months.
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