Can I pay early redemption fee and then go on standard variable?

Northants_Simon

I have a mortgage with the Halifax on a fixed rate at 6.1%, it was fixed for 5 years and I'm two years and three months into it.

I have an early redemption fee of £6000.
The standard variable rate is 3.5%.

Interest a month at present is £833 a month, interest on 3.5% is £466 a month. A potential saving of £2500 to £3000 over the fixed rate period (taking into account paying the redemption fee).

I would save money in the long run by paying off the early redemption fee and going on the standard variable rate. I don't think interest rates will go up much in the next two to three years.

Question is, do banks let you go on the standard variable rate or would I be forced to take another fixed rate?

dunstonh

Question is, do banks let you go on the standard variable rate or would I be forced to take another fixed rate?

Some do, some don't.

beecher2

Phone them up and see what they say - they might expect you to pay up the ERC rather than add it to your mortgage.

redlady_1

I can confirm you have to pay the redemption fee up front if you want to go on their variable rate...I have recently looked into this as I am paying a considerably higher interest rate than 6% with the darling Halifax!!

However, if you remortgage elsewhere, it can be added to the loan providing your salary multiples will allow for the additional monies.