ERC - Finding a new provider

samsiufan

Hello All,

I am sure this question has been asked here already so please forgive me. I have got an ERC of 5% on my mortgage and I am on a fixed mortgage and I am trying to take advantage of the low base rate. My ERC will be about £10k. I am looking for a provider that will be willing to absorb all of that to get me onboard or at least some of it. I don't think my current provider will waive that to give me a new deal though I have not tried....Any thoughts?

Many thanks...

GMS

By absorb do you mean a lender who will pay you to become their customer?

If so why would they? You want to borrow at low interest rates and have the provider pay for the privilege of lending to you?

How much do you owe on your mortgage?
What rate are you paying now?
When does ERC expire?
What is your property worth?

samsiufan

GMS wrote: »

By absorb do you mean a lender who will pay you to become their customer?

If so why would they? You want to borrow at low interest rates and have the provider pay for the privilege of lending to you?

How much do you owe on your mortgage?
What rate are you paying now?
When does ERC expire?
What is your property worth?

IT is a tough time in the markets and I figured there will be some offers out there which I don't know of.

I owe about £199,200 at a rate of 6.33% and the ERC ends in another 3 years time. According to my provider, my property is worth £245,500

GMS

Tough times for the customer, not the lenders.

samsiufan

GMS wrote: »

Tough times for the customer, not the lenders.

you are right but it is worth a try...any advice you can ditch out? because simply adding that to my next mortgage will affect the possible rate I can get - is that correct?

GMS

samsiufan wrote: »

you are right but it is worth a try...any advice you can ditch out? because simply adding that to my next mortgage will affect the possible rate I can get - is that correct?

I wouldn't even begin to attempt to tell you who will give you money to allow them to lend money to you. If you do find somebody though please let me know who they are, might try it myself!!

If you add on the ERC to any new mortgage you need to make sure it will save you at least the cost of the ERC over the remaining term of the ERC tie in or it is not worthwhile.

You need to sit down and do some sums or visit a broker.

_Andy_

No lender offers what you want.

Thrugelmir

Suggest you visit the money saving boards and seek advice. Then use the saving to overpay your mortgage.

Redeeming an ERC at 5% wouldn't help you greatly as it would merely be added to the outstanding balance. Quite possibly at the end of 3 years you'd owe more debt than if you stay put.

The best thing to focus on is improving your LTV to remortgage in 3 years time at a better rate.

samsiufan

Thrugelmir wrote: »

Suggest you visit the money saving boards and seek advice. Then use the saving to overpay your mortgage.

Redeeming an ERC at 5% wouldn't help you greatly as it would merely be added to the outstanding balance. Quite possibly at the end of 3 years you'd owe more debt than if you stay put.

The best thing to focus on is improving your LTV to remortgage in 3 years time at a better rate.

Yes - I have checked with a few advisers and they have said the same thing. My LTV is quite healthy but not healthy enough to really take the plunge and save money at the same time...

somethingcorporate

I don't think you've got a chance to be honest, I very much doubt a lender would make 10k profit out of you over the period of a fix let alone pay your ERC to just get you as a customer.

It's a lenders market at the moment, not a borrowers.

dunstonh

I don't think you've got a chance to be honest, I very much doubt a lender would make 10k profit out of you over the period of a fix let alone pay your ERC to just get you as a customer.

Probably not even close to making 1/10th of that either over the tie in period.