Help please

porkchop01

Hi Please help, im thinkinf buying out of my existing Halifax mortgage and going to a different bank at a much lower interest rate, thing is that i have a penalty for getting out with 12 payments left. Currently it works out that from a 1,500 montly payment only 33% of this goes towards bringing down the capital. Where as on the new propoosed mortgage is the other way round, 66% goes towards the capital. So, if i owed, 250,000 and paid 33% capital and no ealry repayment charge, after 12 payments it would be rough outstanding of 244,060.00. If I opted out of current mortgae and paid 66% towards capital on new one and also a £4,990 early opt out penalty , after 12 payments, figure would be 243,110.00. Am I right to work this out this way or does this make no sense whatsoever, and not only am I crap at math, but also crap at explaining it, please help !! - thanks Scott

TrickyDicky

How much do you earn?
How much is your house worth?
How large is your remaining mortgage?

JimmyTheWig

The way I would look at it is as follows...

Currently you pay £500 off your mortgage each month.
With the new mortgage you'd be paying £1000 off your mortgage each month.
So with the new mortgage you'd be 12 x £500 = £6000 better off after 12 months.

With an ERC of £4990, you're basically £1000 up after 12 months.


You need to consider arrangement fees, exit fees, etc, to switch to the product.
Need to consider if one or other mortgage is a fixed rate.