Overpayment, then early repayment

zeb222

Hi everyone,
I was wondering if anyone knew the answer to this one....

I currently have a Woolwich mortgage with a yearly overpayment cap of 5%, and a 6% early redemption penalty. I have recently inherited a substantial sum of money which I want to use to pay off the mortgage, so am willing to take the 6% one-off hit but would like to minimise it if possible.

My question:

If I have already overpaid by the maximum allowed in a year, and then pay off the mortgage entirely – thereby triggering the early repayment fee – do I have to pay the fee on the part I have overpaid as well, or just the remainder of the mortgage?

e.g. A mortgage of £100000

If I overpay the maximum of 5% (£5000k) the mortgage would now be £95000.

So: if I now repay the mortgage early, thus triggering a 6% early repayment charge, would I pay this on £95000 (i.e. £5700) or on the full £100000 (i.e. £6000)?

Thanks in advance.
ZEB

getmore4less

what's the mortgage rate?

ask the cost to go offset

ask about reducing the term to the penalty free date(increases regular payment )

getmore4less

there will be an optimum way to do it depending on the variables.