📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Is it possible to Pay 10% off the mortgage and then get an ERC on a lower amount?

Hi there, I am in a position to pay off my mortgage, however, looking to try and save money on how to do it.
The mortgage is close to £150k, I pay about £300 interest a month on average and my current deal as about 18 months to run.
I never make any over payments so I do know I have my 10% available to pay.
My question is, if I pay 10% next month and bring it down to around £135k, can I request a settlement figure, which will be on the £135k only and only pay the ERC on £135k? Or will they advise as I have already paid the 10% over payment, I will incur a further charge?
Just looking for the best way to make a saving, I dont want to let the deal run and pay the interest as that will end up more than the ERC or very close.
TIA

Comments

  • A_Frayed_Knot
    A_Frayed_Knot Posts: 3,308 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 8 May 2020 at 5:08PM
    I would imagine so, however you would need to check the t&c's of your mortgage, the ERC %'s should be on it.
    Normally, if say a 3 yr deal, then its, 3% ERC in year 1, 2% in year 2, and 1% in your last year.
    Cannot imagine you would incur a further charge, they should base the ERC on your balance when you ask,  I got my figure over the phone when I asked about clearing my mortgage (just out of interest).
    So some sums need to be made, reaching for the calculator, then decide.
    Congratulations on being able to pay off such a large amount.
    Should also state that the 10% overpayment allowed is usually the figure at the start of the year, which may have been a little more than your mortgage is now.
    So maybe you need to ask just how much you can o/p without incurring a charge.
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
  • Thanks for that info, I think I will call them on Monday (if I can get through) and ask for a settlement now and also if I pay my 10% first. 👍
  • A_Frayed_Knot
    A_Frayed_Knot Posts: 3,308 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    Mind and ask what the 10% figure would be allowed before a charge is made.
    Good Luck.
    I got my figure - paid it, then weeks later received a letter saying I had overpaid too much, but since it was a low over/overpayment they would waive the charge !!!  Just as well or they would be told it was them that gave me the figure in the 1st place.
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.5K Banking & Borrowing
  • 253.3K Reduce Debt & Boost Income
  • 453.9K Spending & Discounts
  • 244.5K Work, Benefits & Business
  • 599.8K Mortgages, Homes & Bills
  • 177.2K Life & Family
  • 258.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.