ERC - Fixed or Sliding?

MrPaul_3

Hi

I'm looking at a long-term fixed rate mortgage (20 years to be exact). I know many will be cringing at the thought of ERC's for that length of time but I feel I can sleep more easily with a charge I know of rather than waiting every month to see what sort of mood the BoE are in. I'm not mortgaging myself to the hilt based on what lenders are willing to let me borrow, but would not really be comfortable with any increase in repayments as I want to keep the limited lifestyle to which I have become accustomed.

What I really want to know and have not really managed to get a complete answer on yet is - My ERC is quoted at 6 month interest plus a release fee of £140. It does not make it clear on either the KFI or the offer as to whether the 6 months interest payable is based on the entire mortgage amount or on the amount repaid early (hence the title of my thread).

The Mortgage is with the Nottingham BS and I will be taking to them as soon as I can get through.

In the meantime does anyone else know?

:beer:

herbiesjp

It would normally be on the amount above any permitted overpayments.

So if you were allowed 10% capital overpayments each year, they would allow that, but then charge the ERC on any amount above that figure

recyclingbox

why not go for a five year fixed - you keep your current lifestyle without comitting to a huge length of time. If rates drop you may find yourself really fed up at the money you are handing over when there was no need. 4 five year terms is the same as 1 twenty year! is it likely that your circumstances will change in the next 20 years - better job, children, marriage, retirement, children leave home etc?

Of course rates may keep on bounding up and you are laughing all the way to the pub...