C & G Closing Admin Charge for Early Repayment of Mortage

lgb2100

I received my Mortage statement early this year for my Mortage Account upto the end of Dec 2011.

This stated the current balance and what the charge would be if I was to Repay the Mortage in Aug 2012 (The date of which the fixed rate term finishes).

This Charge was a little over £751.

I've been shopping around, for a new mortage deal and asked C&G for a Redemption Statement.

This I have received and the current Balance looks correct, but the closing Admin charge is £735 (for redemption in June).

Does this seem right - A reduction of £16 to what it was at the End of 2011 - yet six mortage payments have been made. (I was expecting a charge nearer to £200 as there's only two months left before the charge is clear )

Thrugelmir

lgb2100 wrote: »

(I was expecting a charge nearer to £200 as there's only two months left before the charge is clear )

Depends on how the redemption figure is calculated.

I would be surprised if it had reduced by £500 in such a short space of time.

lgb2100

My calculation was :-

In Jan 2012 - A charge of £751 for early redemption
If wait until Aug 2012 - No charge.

So £751 covers eight months.

So pro-rata,, this is reduced by (£751/8 for each Jan 2012)

Month Redemption
Dec £751
Jan £657
Feb £563
Mar £469
Apr £376
May £282
June £188
Jul £94
Aug No Charge

So for a redemption to complete in June a charge of around £188 to be made payable.

It's a shame that I cant wait until end of Aug - so that I will have no fee to pay.

Thrugelmir

lgb2100 wrote: »

My calculation was :-

In Jan 2012 - A charge of £751 for early redemption
If wait until Aug 2012 - No charge.

So £751 covers eight months.

So pro-rata,, this is reduced by (£751/8 for each Jan 2012)

Redemption fees aren't calculated like that normally.

More often or not its a % of the mortgage balance. Up until the fixed term ends.

Simon_gloster

Early repayment charges are based on a % of the current balance a that time.

Unless your mortgage balance reduces massively because your term is short.

No one can give you a direct answer without knowing your current rate, term and repayment method.

On the outside looking in, it seems right as the penultimate month prior to rate reversion may still have an ERC of £700, then the month the rate ends is £0.

Spiggle

Is there no way at all you culd wait until August? Seems such a shame to pay that out with only a month and a bit to go.

All the best,
Spigs

lgb2100

afraid not.....

new mortgage needs to be in place before August....

At least with only a £99 fee, paying the £700+ ERC isn't too bad.

(looking at past mortage statements, ERC has been the same % of the outstanding balance, so for current mortage, it must be the % fee until end of final month, then drops down to zero)

Thrugelmir

lgb2100 wrote: »

afraid not.....

new mortgage needs to be in place before August....

At least with only a £99 fee, paying the £700+ ERC isn't too bad.

What SVR do you drop onto? Maybe worth checking before doing anything.