Redemption Penatly

tackle2004

I have a mortgage with Alliance and Leicester and have now sold my house which I was not expecting to do this quickly. I am now buying a property mortgage free with the equity but I am having to move into rented first as the house I am purchasing is not ready yet.

The redemtion penatly is 3% of the balance out standing. The mortgage is fully flexiable and I can make as much capital repayment as I wish as long as I do not pay the full amount outstanding. Can I pay off 99% of this 1 week before I fully pay off the debt and sell the property so that I only pay the 3% penalty on 1% ???

NorthernLad_2

You would have to refer to your offer of loan which you will have recieved at beginning of your mortgage. This will clearly state whether the Early Repayment Charge is payable and on what amount.

Sorry to be the bearer of bad news but the chances are as the mortgage is fully flexible this will be on the amount you borrowed rather than on the amount you repay.

You may be able to keep your mortgage as it is and port it to your new property (even though it isn't ready yet) some companies will allow you to pay the charge and providing you return to the mortgage within 3 months will refund the early repayment charge. Something worth considering because then you could pay off the 99% once you have moved and keep this running until your commitment period ends.