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  • FIRST POST
    • SuzieGirl
    • By SuzieGirl 11th Mar 17, 3:52 PM
    • 38Posts
    • 31Thanks
    SuzieGirl
    Is ERC charged every time overpayment is made?
    • #1
    • 11th Mar 17, 3:52 PM
    Is ERC charged every time overpayment is made? 11th Mar 17 at 3:52 PM
    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
Page 1
    • glosoli
    • By glosoli 11th Mar 17, 4:00 PM
    • 555 Posts
    • 304 Thanks
    glosoli
    • #2
    • 11th Mar 17, 4:00 PM
    • #2
    • 11th Mar 17, 4:00 PM
    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
    • By Thrugelmir 11th Mar 17, 4:09 PM
    • 54,324 Posts
    • 47,134 Thanks
    Thrugelmir
    • #3
    • 11th Mar 17, 4:09 PM
    • #3
    • 11th Mar 17, 4:09 PM
    Maybe worth timing the over payments to avoid paying the ERC.
    “ “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
    • SuzieGirl
    • By SuzieGirl 11th Mar 17, 5:06 PM
    • 38 Posts
    • 31 Thanks
    SuzieGirl
    • #4
    • 11th Mar 17, 5:06 PM
    • #4
    • 11th Mar 17, 5:06 PM
    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?
    Originally posted by glosoli
    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
    • By getmore4less 11th Mar 17, 5:53 PM
    • 29,137 Posts
    • 17,423 Thanks
    getmore4less
    • #5
    • 11th Mar 17, 5:53 PM
    • #5
    • 11th Mar 17, 5:53 PM
    £40k will last you over 10years of reduced income..

    if planning to claim means tested benefits consider the deprivation rules.
    • dimbo61
    • By dimbo61 11th Mar 17, 8:30 PM
    • 9,394 Posts
    • 5,093 Thanks
    dimbo61
    • #6
    • 11th Mar 17, 8:30 PM
    • #6
    • 11th Mar 17, 8:30 PM
    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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