paying off mortgage completely

celtic123

ok these figures are hypothetical! assume we have a 100,000 mortgage and we have 50,000 left to pay. assume current apr is 12% lol and there are no early redemption fees. could you, this month, pay (1.01x 50,000) and then mortgage would be paid off?

CLAPTON

well you would need to ask for a specific quote which will be time limited; but in essense yes you would pay the balance plus interest to the pay by date

HappyMJ

No, you would pay as much as possible (£50,000) then wait for the residual interest to be charged then keep on paying residual interest until it's so little that they don't debit your mortgage account any more. Or you could ask to close the mortgage account but you will find there are fees with that. It's usually cheaper just to let the mortgage account run it's course leaving £1 outstanding all the time.

celtic123

ok i pay 50,000 plus 500. if there are no early redemption charges then.how the heck to i still keep paying interest

kingstreet

Like CLAPTON said.

Ask the lender for a redemption figure as at a certain date. This will take into account the outstanding capital and any accrued interest upto the point of redemption.

If the mortgage is with a building society, you're probably paying in advance, so a redemption close to the beginning of the month and close to the last regular payment may see a redemption figure lower than the outstanding balance.

CLAPTON

celtic123 wrote: »

ok i pay 50,000 plus 500. if there are no early redemption charges then.how the heck to i still keep paying interest

maybe provide some facts; always makes answers more relevant

celtic123

what more facts is needed. its a theoretical example with.no early release fee. no need to be invidious

kingstreet

You can't always answer the way the OP would like.

Anyone searching for "paying off mortgage completely" is probably looking for the procedure they'll need to follow to be able to do what they are hoping to do, pay off their mortgage early.

In answer to your "hypothetical" question, we'd need to know;-

A - the true charging rate, not the APR
B - if interest is charged daily, monthly or annually
C - if interest is paid in advance or in arrears
D - the monthly payment date
E - the assumed redemption date.

In the advice I gave in the earlier post, the lender would know A, B, C and D and you would provide them with E.

celtic123

ok lets assume 12% apr is the current rate (whether its bonds, libor or base rate,svr or swaps that they follow). ie if interest rate would stay 12% if calculated for a year

assuming interest is paid monthly and in arreas. assuming i want to pay off completely then. forgetting minute differences in compound interest, i am wondering whether total required would be around 50500 pounds