Help Pay off a fixed rate mortgage

commann

Hi,

I have a small Alliance & Leicester fixed rate mortgage with 2 years of terms to go, i want to pay it off but the early repayment charge is over £1800, is there ant way to avoid this crazy charge.

Robert_Sterling

You will have been told about the early redemption fee prior to taking the two year fixed rate mortgage.

You now have a choice. Pay off the mortgage and pay the redemption fee or put the money in a two year fixed rate bond ( e.g. 6.2% West Brom ) and then pay off the mortgage in two years time and avoid the redemption fee.

Although you say the system is crazy it is common practice.

_Andy_

commann wrote:

Hi,

I have a small Alliance & Leicester fixed rate mortgage with 2 years of terms to go, i want to pay it off but the early repayment charge is over £1800, is there ant way to avoid this crazy charge.

What exactly is 'crazy' about it?

epz_2

im assuming that you took out the morgage at least 6 months ago, now given the interest rates have go up 3 times recently and likely anotherone soon i would guess a fixed rate would be a pretty good thing to keep hold of.

not sure if its possible but it would be smart if the fixed rate is below the base rate for the bank to offer to waive this charge but that assumes somone has the authority and predicted 2 year analysis which would prove it will cost them more to keep you as a customer.

that said you did agree to give them your buisiness in exchange for a fixed period, not unreasonable for them to want a commmitment while you enjoy the benifits of a stable rate.

Sooler

can you pay it all of except for £24 and then pay £1 a month?

southern_chick

Hi Sooler

normally with a fixed rate mortgage you are only allowed to pay off a certain amount per year (about 10% dependent on T&C) if you pay more than that you are liable for the redemption fee