remortgage question

mabbam

Hi,

My 5 year fixed mortgage is about to come to and end. I have a lump sum that I would like to pay off when I take out my next mortgage, which will be taken out with the same provider. Would it be best to pay off the money on the initiation of my new mortgage or use it as an overpayment spread over a number of months? If I pay off the lump sum in one go will I encounter any early payment charges.

Thanks in advance

smitchy73

Depends on the details, some lenders allow you to overpay by up to 10% over the year, up to a maximum, I think the Halifax is about £3k. You shouldnt get any early repayment penalties unless you're not allowed to overpay, or if you go over you're allowance.
Also if you're allowed to pay in your lump sum, it may allow you to get a better deal if your LTV is lowered by making the payment, giving you a better interest rate.
Hope this helps.

mabbam

Thanks for the info smitchy73. Would my lump sum be counted as an overpayment if I paid it off on the initiation of the new mortgage term?

VIGILANT22

when yr deal ends is yr new mortgage set up to kick in immediately?
if not, when yr current deal ends you will automatically default to the standard variable rate at which point you can pay lump sums without incurring penalties for overpaying............