Paying it all off... tripping over the last hurdle

HarveyHumphries

1) My current mortgage deal expires (along with its hefty early-repayment penalty) on 1/08/14 - leaving me around £180k to repay.

2) A three-year Post Office bond which is (just!) sufficient to pay off the £180k matures on 25/08/14.

Is there any way I can avoid a crippling bridging loan for these three weeks?

joedenise

I would assume that the mortgage will revert to SVR can you not just pay the mortgage until the bond matures?

Denise

HarveyHumphries

Thanks. Pretty sure though that they will reimpose the early-repayment penalty (£8K!) if I do so.

SuperSecretSquirrel

HarveyHumphries wrote: »

Thanks. Pretty sure though that they will reimpose the early-repayment penalty (£8K!) if I do so.

First thing to do is check this with your lender. It's not the norm to charge ERCs once the 'deal' period has expired and you are on SVR.

If you were to ever remortgage, would you have to pay your lender an ERC to move? Doesn't seem right to me. During a fixed/discount period, sure, but beyond that sounds iffy.

HarveyHumphries

Thanks, will do.

It's a slightly weird situation: we live in the top half of the house, and rent out the bottom, which meant our lender decided to treat it as a buy-to-let mortgage (steeper rates, higher ERC).

Hopefully you're right and they'll let us do a month on SVR (or a higher BTL rate close to it) and then do the pay-off without a penalty.