The "Should I Ditch my Fix?" Calculator Discussion Area

the_root_of_all_evil

MarkyMarkD wrote: »

I don't understand why on earth "the root of all evil" thinks that redeeming the mortgage due to selling the property will be exempt from the ERC - it won't.

And I don't understand pineapple's answer either.

The simple answer is that "the root of all evil" is proposing a pointless pair of transactions which will trigger the ERC and require obtaining a new mortgage which is unlikely to be significantly cheaper when all the costs of 2 sets of legal fees and one set of mortgage application costs is considered.

so, if i sold my house and went into the rental sector i would still have to pay the ERC?

i am trying to find a work around so i dont have to pay the ERC.

are you saying that i have to pay the ERC even if i sold my house to anyone?

ixwood

You have to pay the ERC if you redeem the mortgage before it the ERC expires.

MarkyMarkD

ixwood wrote: »

I don't understand. Surely you can switch any time you want, but you'll obviously be charged the exit fee? Else, what's the point of it?

No. You can REDEEM your mortgage and remortgage to another lender, and pay the ERC.

You do not have the right to STAY with your existing lender, but on a different deal. That is not what the ERC is about.

the_root_of_all_evil

it seems the erc will be triggered even if i sell my house.

i can over pay a lump sum but get charged 2% over 10000.

MarkyMarkD

Indeed, that's what I said.

I'm not sure why anyone would imagine it would NOT be triggered by selling the house - it is an Early Repayment Charge. If you sell the house, you repay the mortgage.

the_root_of_all_evil

well if thats what you said then you were right¬ :T

dizzybuff

Okay need a bit of advise , dunno whether its the right place.

We are currwently fixed into a Bristol and west morgage for the next 16 months , fixed @ 6.29%

We are reviewing all of our financial committments and I was wondering if it would be worth it contacting the morgage lender to see if we can transfer to another account type.

Do you think this would be possible , we took this out before the economic turndown so we are now seeing freinds paying pittance for huge houses. Just the way it goes I know but want to see if we can help ourselves a little

Jonbvn

dizzybuff wrote: »

Do you think this would be possible

Short answer is NO!

Think of the converse situation and rates had risen. Would you still be looking to change? This is the risk you and the lender take with FR mortgages.

dizzybuff

hmmmm okayyyyy.. I understand the risks just wanted a few more options.. thanks for the opinion anyhoos

MarkyMarkD

There are more options; the original response wasn't very helpful.

You could redeem your 6.29% mortgage, pay the Early Repayment Charge, and remortgage elsewhere. If your income is sufficient, and you have sufficient equity to qualify for a good rate elsewhere, that is. That's the whole point of this thread.