£2.500 exit fee?

MarkyMarkD

Then save up the overpayments you would otherwise be making (in an ISA if you are not already fully subscribed), and pay them off the loan when you remortgage in a year's time.

IHateDida

MarkyMarkD wrote: »

It's virtually NEVER worth paying an ERC to switch mortgages, and I'd say even more unlikely with any sort of discounted loan.

We are paying an ERC of £1600 to get out of a Halifax fixed rate as we are more than doubling our mortgage buying a new house. We have worked out that even after paying the ERC, we will save 1000's rather than sticking with the Halifax as their rates seem rather high compared to many that we looked at. We have about another 3 years to run on the fixed, and even over that time because our old fixed is higher than our new fixed, we will save money, even after the ERC!

But in few weeks building up to the change of the mortgage, our mortgage pig is working over time trying to build up more so to at least reduce the ERC by a little bit!

MarkyMarkD

Thanks for that, IHD. I agree with you that moving house, and borrowing a lot more, is a good case for paying an ERC.

But what I meant was that paying an ERC to simply remortgage with no additional borrowing is almost always a bad move.

Even with a bit of additional borrowing it's probably not worth it in the current interest rate environment.