Overpay to reduce penalty

lky2k23

I've got a 4% mortgage I'm going to exit when I move homes in the near future. I have to pay 3% of outstanding as early repayment fine.

If I over pay 10% I'm allowed to before I exit, I'll reduce the total amount owed and therefore my 3% penalty - right? I have the 10% in my account now.

Thrugelmir

Overpaying the mortgage will reduce the ERC penalty. As it's calculated on the amount you owe at the point of redemption.

With an interest rate of 4%. Beneficial to overpay your mortgage in any event.

When you move house porting your existing mortgage may be an option. So possible to avoid paying an ERC and letting your mortgage run it's product term through to expiry.

lky2k23

Thrugelmir wrote: »

Overpaying the mortgage will reduce the ERC penalty. As it's calculated on the amount you owe at the point of redemption.

With an interest rate of 4%. Beneficial to overpay your mortgage in any event.

When you move house porting your existing mortgage may be an option. So possible to avoid paying an ERC and letting your mortgage run it's product term through to expiry.

Unfortunately not able to port due to working contract change.

Thanks. I'm unsure why the couple of mortgage experts didn't suggest overpaying with my new extra deposit.

amnblog

Like many things with Lenders it's rarely that simple.

Check the notes with this Halifax example

http://www.halifax.co.uk/mortgages/mortgage-information/early-repayment-charges/

Also this Barclays one

https://www.help.barclays.co.uk/faq/mortgages/repayments-rates/overpayment-charge.html

Check with your own lender