redemption penalty or pay it off?

I have made a decision to sell my house. Sadly, I didn't make the decision 6 months ago, as I am now 6 months in to a 2 year deal. But nevertheless, my decision has to stand. Now, I have sufficient equity in my home to pay off my mortgage (owned it 25 years), and buy my daughter a much smaller property, and have a bit extra cash in the bank. (yes, I realise how lucky I am)

My question is, should I take the hit of the redemption penalty which will be around £3600, or should I port the mortgage to the smaller property and continue paying the mortgage until the expiry date.

This would mean I pay the mortgage amount of around 700 for another 15 months (eg 10500 ish).

It seems to me that paying the mortgage off would be the best option, but my partner insists I should wait til my deal runs out. Am I missing something?

thanks

Replies

  • fresh_cottonfresh_cotton Forumite
    40 Posts
    Mortgage-free Glee!
    How much is the penalty in terms of percentage and what's the interest rate ?
  • Fizzy11Fizzy11 Forumite
    128 Posts
    Sixth Anniversary 100 Posts
    I’m no expert but I’m assuming you have no other ‘debt’ so personally it all depends on your preference but you need a clever person to work out whether you’re paying more in interest over the 15 months than the redemption penalty if you redeem it now.
  • SparkyGradSparkyGrad Forumite
    100 Posts
    100 Posts First Anniversary
    Do you know what your balance and interest rate on the mortgage is right now?

    To pay it off now you'll pay the balance plus the redemption charge, to pay it off later you'll pay the balance plus 15 months' interest. Without having numbers to do the maths on, we can't really help.
    Electricity industry background, now working in insurance forensics.
  • getmore4lessgetmore4less Forumite
    45K Posts
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    ✭✭✭✭✭
    I have made a decision to sell my house. Sadly, I didn't make the decision 6 months ago, as I am now 6 months in to a 2 year deal. But nevertheless, my decision has to stand. Now, I have sufficient equity in my home to pay off my mortgage (owned it 25 years), and buy my daughter a much smaller property, and have a bit extra cash in the bank. (yes, I realise how lucky I am)

    My question is, should I take the hit of the redemption penalty which will be around £3600, or should I port the mortgage to the smaller property and continue paying the mortgage until the expiry date.

    This would mean I pay the mortgage amount of around 700 for another 15 months (eg 10500 ish).

    It seems to me that paying the mortgage off would be the best option, but my partner insists I should wait til my deal runs out. Am I missing something?

    thanks

    your want to port your mortgage to a new place you are buying for your daughter?


    Will you be living in the place as well?
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