mortgage redemption figure query

pc10

Hope someone can help with this.

I am due to redeem my current mortgage on Monday and remortgage with a different company.

Today I received a mortgage statement detailing that the amount owed at the end of January was £36149.46.

I also got a letter from my current lender and also copied to my solicitor stating that the amount required to redeem my current mortgage on Monday is £38658.58 which includes £150 banks sealing fee and £115.54 representing the banks early settlement compensation sum.

To me this leaves £2243.58 which I am unable to account for.

I am redeeming this current repayment mortgage early (approx one month) and on my original documents it stated there was a 6 month penalty for early redemption which I was expecting to be around £1200. On the mortgage statement the total interest added on 31.03.04 was £2285.89 so I would have expected that 6 months interest would have been about half of this).
Current interest rate is 6.8% variable.

Am I missing something?

What is the extra £2243.58 for?

Is the £115.54 the interest payable from 31.01.05 (date of my last payment) until Monday when I change over to new company?

Or is this £115.54, the 'early settlement fee' that I was expecting to be around £1200?

I hope someone can shed some light on this so I will know what I am talking about when I phone the bank on Monday morning.

Cheers

MarkyMarkD

I'm surprised that there's any material difference.

I have just had my annual mortgage statement from YBS, in a new format (which I believe is FSA mandated). It shows me the actual balance at 31/12/04 and also (more relevantly to this discussion) the actual cost to redeem at 31/12/04 - which includes the early repayment charge you speak of. It also clearly specifies how much ERC is payable and until what date (as mine expires in June).

If your statement makes no reference to anything else, it sounds like your 6 months' interest calculation is reasonable and I should just ask them to break down the redemption amount between capital and fees.

By the way, why are you redeeming "one month early" and happy to incur a £1,200 fee for doing so? Why not delay your remortgage until the penalty expires?

bridiej

You need to phone the company and ask them, might just be a simple error.

Must admit I think you'd be better off waiting the six months, after all it's another £1200 that could be in your pocket...

pc10

Thanks for the replies.

There are many and varied reasons why I am redeeming the mortgage one month early and I can see how it may not seem like the right thing to do but its unavoidable.

But I'm still confused about the redemption figure!