2nd mortgage repay

sqster123

Hi

I took out a second mortgage a couple of years ago for some refurbishments to the house.

I will be in a position soon to repay that off in full as it was quite a high interest rate.

Am I right in thinking that the settlement figure is the ‘amount’ I borrowed plus 2 months interest as detailed by the lender below.

Just I’ve suddenly had a panic after reading some articles that as the mortgage is front end loaded with interest that the settlement figure includes that interest? Also when I check Clearscore the loan shows up with ALL the interest included like I have taken out a massive loan. Whereas the original mortgage doesn’t show like that.
I’m hoping I’ve got that wrong and just panicked myself. I accept that the ‘actual’ amount I borrowed may not have decreased a lot as we haven’t had the second mortgage for long. But it was at a high interest rate at the time.

This is what is from the lender...
Early repayment charge (full repayment): If you repay the mortgage early in full you are required to pay an early repayment charge calculated on the basis of the last two months' interest charge.

AnotherJoe

Front end loaded loans are illegal. All they are doing is showing you the interest that woudl be paid if you kept the loan to the end of its term.
I see no reason for you to doubt their statement regarding ERC.
So yes it does appear you have panicked yourself.
Please do report back on the outcome.

Nebulous2

It should be even better than that. The amount due should be the amount you borrowed, plus 2 months interest, less any capital you have already paid in your normal repayments.