Understanding ERC and overpayments.

moneysavinggirl40

I am coming to then end of my mortgage and think this will be the last time I will remortgage, or get a new deal with same provider.

Should I ask them to shorten term? I still have 9 years left on the term. However I think I have overpayed in the past so that I can actually finish paying off the mortgage within the next 3 years.

What sort of product should I be looking for? One with limitless overpaying facility and no ERC and/or a low exit fee. Is there any such product out there? As I would be in the position to pay the final balance.

Say I get a 3 year product and before the inital period is up let say 11months early I am in the position to make the final payment. The product says 20% overpayment allowed no ERC. Does that mean there won't be a penalty, when the mortgage comes to an end?

Let's say product had penalty of 2% ERC when I came to final payment. Can you tell me what this figure would be? Is it 2% of the original amount borrowed?

Can anyone suggest a better product or plan I should be going for? One where there is little extra fees to pay when exiting/paying off mortgage.

DeterminedSingleMummy

Hi

I'm in the similar position to you. I have ten years left on my mortgage however aiming to pay it off in 5 years time with my overpayments. I'm fixed for 2 years so next time I look for a new deal I will be looking for one that has no early repayment fees.

But I'm also interested in what other options there are x

NelliePie

I'd speak to L&C, I'm a big advocate for them (not affiliated in any way but had some really good experiences). They're whole of market, impartial and fee free so why try and work it out yourself when you can get the professionals to do it for you?! We explained our situation and they took some info, what we wanted/would suit out needs etc and the next day they came back with their recommendation (and the reasons why) and a few other options. By all means have a look yourself as well but its their job.

moneysavinggirl40

NelliePie wrote: »

I'd speak to L&C, I'm a big advocate for them (not affiliated in any way but had some really good experiences). They're whole of market, impartial and fee free so why try and work it out yourself when you can get the professionals to do it for you?! We explained our situation and they took some info, what we wanted/would suit out needs etc and the next day they came back with their recommendation (and the reasons why) and a few other options. By all means have a look yourself as well but its their job.

Oh yes L&C are not bad are they? I used them last time I remortgaged. But before I contacted them I did my own searches for what's around. Though I am not sure what questions I should be asking when coming to the end of a mortgage. I guess flexibility might be another thing to consider. Do I keep the mortgage but have a zero balance for the rest of the term, is there such a mortgage that will let me do that?

getmore4less

If able finish in 3 years the interest won't be that much a slightly higher rate unlimited overpayment and longer full term will keep some flexibility to reduce payment.

Depending on amounts there may be a way to finish in 2y with some stoozing.