Is there ever a chance of getting reduced early repayment charges? Other options?

Tunstallstoven

Hi all

I'm pretty certain I know the answer to this and my apologies in advance if it is a bit of a stupid question. But I'd hate to miss something and so thought I'd check for peace of mind......

My partner and I are 3 years into a mortgage which is a 10 year fixed. The early repayment charges are:

£3,800 in the first 5 years
£1,900 in the last 5 years

Seeing as interest rates have remained so low we would love to switch, but the £3,800 fee would not make it worthwhile.

Are there any ways of getting that reduced?

Or is there any other option (a second mortgage etc)?

Or are we stuck with it....

Many thanks

Max

Let_Us_See

............I think you already know the answer!

Dave_Ham

Almost certainly no chance and the Financial Ombudsman rarely side with the client in these situations..

Unless of course you are potentially with a non-confirming lender who wants you off the back book, but again incredibly unlikely.

Tunstallstoven

It's as I thought then. Never mind. I wanted to ask just in case I found something out in years to come that I wished I'd asked about now (if you know what I mean).

Thanks for the help.

lee111s

What is your mortgage rate now? What rate would you want to switch to and over what period? Are you currently overpaying on your mortgage?

Tunstallstoven

lee111s wrote: »

What is your mortgage rate now? What rate would you want to switch to and over what period? Are you currently overpaying on your mortgage?

Currently on 6.09%.

We would want to switch to the lowest possible rate (hahaha). Preferably a 5 year period.

Yes, we currently overpay quite heavily and the new mortgage would have to allow for substantial or unlimited overpayments....

lee111s

To be able to determine if it's better for you we'd need to know what rate you'd be wanting to switch to and for what period the new rate is for. Most of which depends on your oustanding balance/mortgage term and LTV.

Tunstallstoven

lee111s wrote: »

To be able to determine if it's better for you we'd need to know what rate you'd be wanting to switch to and for what period the new rate is for.

I'm awaiting a call back from London and Country on this, and will do some of my own research for qoutes as soon as I get a moment.

lee111s wrote: »

Most of which depends on your oustanding balance/mortgage term and LTV.

Outstanding balance of £60k.
Original mortgage of £95k.
House purchase price of £158k.
I think the term is 25 years but we've never really paid attention to that as we hope to have repaid well before....
The current mortgage ends August 2019.

Thanks again....

kingstreet

£60k x 6.09% x 7 years = £879.10.

£60k x 2.79% x 7 years = £787.13. (Example of best 5 year fix)

£92 per month difference.

Not enough to warrant paying £3,800 in penalties, TBH. It'll take you over three years to break even.

Your mortgage is too small and for too short a remaining term to make it worthwhile. If you are looking to borrow more, or over a longer term the situation might change.

At least see out the period until the penalty cuts in half.

Tunstallstoven

Thanks for the info kingstreet and for doing those sums for me. My head breaks apart when I try to do the maths (or math for the sake of Americans reading this)!

But how do the sums change if we bring the overpayments in to the equation? Let's say we can pay a TOTAL of £1300 per month for now on up until the end of the mortgage. Does that change things significantly enough to think about switching?

Many thanks for the help

kingstreet

Voluntary overpayments would reduce the interest payable and hence negate even further a remortgage to a lower rate.

I've just thought that through and not actually proved it to myself with calculations, so I'm working on instinct here.