Possible to leave £10 in your mortgage to avoid ERC

minimike2

It doesn't need to say unlimited, because it isn't unlimited.

It is quite clear from the posts as already stated that the ERC is only charged in the event of a full redemption but that ERC's do not apply to lump sum reductions.

Most people then just put this into simpler terms of calling it unlimited and the above post is just being picky.......

Thrugelmir

minimike2 wrote: »

It doesn't need to say unlimited, because it isn't unlimited.

It is quite clear from the posts as already stated that the ERC is only charged in the event of a full redemption but that ERC's do not apply to lump sum reductions.

Most people then just put this into simpler terms of calling it unlimited and the above post is just being picky.......

Not sure what you are rambling on about.

For clarity the paragraph I'm referring too is.

Early Repayment Charges do not apply to first direct mortgages if you choose to make overpayments or lump sum payments to your mortgage.

My question is whether the specific product being applied for has restrictions. Otherwise this should clearly state unlimited for clarity.

cbrpaul

Thrugelmir wrote: »

Where does it say unlimited?

5th para down


http://mortgages.firstdirect.com/our-mortgages-explained/fixed





ps I see no-one rambling

Thrugelmir

cbrpaul wrote: »

5th para down


http://mortgages.firstdirect.com/our-mortgages-explained/fixed





ps I see no-one rambling

That's different wording to the KFI.

dunstonh

For reference, the 1st post was slightly edited as I made mine. The version I replied to was slightly different......

However, on the point of what the webpage says:

"you are able to make unlimited over payments to your mortgage whenever you choose"


That doesnt say whether they charge or not. The statement is correct whether there are charges or whether there are not charges.

However, pPage 9 of 9 on the following pdf though say "without incurring ERC".
http://www3.firstdirect.com/assets/pdf/mortgage_interest_rates.pdf


The next question would be: "how much can you leave on the balance of the mortgage before they force closure of it".

regprentice

My previous mortgage allowed full repament without charge withing the first 10 years. My current mortgage allows overpayments to 10% of the orignal mortgage balance.

Based on my overpayment experience (with the Nationwide) if you left a tenner in the mortgage, they would recalculate you mortgage as £10 / total months left and start deducting that payment.

I was able to pay £15K of my mortgage (with no ERC type penalty) and then fill out a form and pay £20 to reduce the remaining term from 15 years to 7 years. Nationwide then recalculated the payment and started charging the new amount shortly afterwards.

Dependant on your mortgage provider I would assume you could pay the mortgage down substantially (though perhaps £10 is pushing it, some one else suggested a grand) then request a shortening of the term to the minimum allowed.

When i did this i spoke to a member of Nationwide staff, they were helpful and checked i'd done my overpayment sums correctly. Based on my experience i'd encourage you to call your mortgage provider up and simply ask.

amnblog

These mortgages where the ERP only triggers on full redemption are rare, but they are out there.