90% LTV and no Early Repayment Charge

Glastoun

I've done some searching for a 90% mortgage with no ERC/penalty-free overpayments, and the only lenders that show up are First Direct and HSBC (essentially the same company).

Does this sound right? Do most 90% mortgages have an ERC?

kingstreet

There are nine lenders more than the HSBC Group who offer 90% mortgages with no ERP.

Most 90% products have some kind of benefit attached to them (fix, discount etc) so a penalty is pretty normal.

Glastoun

Thanks for the heads-up - I guess I'd have to pay to find out who those other nine are, eh.

We're speaking to Santander this afternoon, but may end up just going with a broker as we have a couple of things that could make it a non-standard application and don't want to waste credit checks on applications we may not be eligible for.

kingstreet

You won't necessarily have to pay. Just transact the application through a fee-free broker and they will be paid commission by the lender.

Glastoun

"Except for viewers in Scotland..."

As ever, forgot to mention I'm in Scotland. When I didn't tick this box on a mortgage finder website there were quite a few mortgages with no ERC (Hinckley & Rugby had the best deal) but as soon as I ticked the Scotland box it was ERC all the way. So based on that is it First Direct or nothing?

GMS

What makes the application non standard aside from being in Scotland?

Why do you want no ERC?

Glastoun

We have a flat to sell in 6 months time, and ideally want to put that money straight into the mortgage, if not remortgaging at that time to get a lower interest rate. If we can't do that, and can only overpay 10% of a 2-year fixed mortgage, that would leave us £2-4k out of pocket over that 2 years.

Don't have the deposit to consider an offset mortgage, which would otherwise be a good solution.

Non-standard is that one of us works fixed-term contracts (continuous employment for 6 years with 4 companies though) and current contract expires in Autumn; and t'other might be changing job in the summer, so need to go with a lender that doesn't mind job changers.

ValHaller

Glastoun wrote: »

We have a flat to sell in 6 months time, and ideally want to put that money straight into the mortgage, if not remortgaging at that time to get a lower interest rate. If we can't do that, and can only overpay 10% of a 2-year fixed mortgage, that would leave us £2-4k out of pocket over that 2 years.

For this, I would think about taking out a secured loan on the flat enough to take you down to an 80% or 85% product with no ERC.

I'm not a broker, so I don't know whether this idea would work, but if you told us the value of your flat and the mortgage outstanding, your salary, savings and value of the new place, I am sure that you'll get a quick opinion.