Mortgage redemption statement

canaldumidi

charleneann09 said:

Hi I have received a mortgage redemption statement and on it interest has been added. I have to pay an early repayment charge but this is separate. Does anyone know what it's for? If I paid a lump sum off would it reduce it?

So you have a statement showing

* the outstanding capital you owe

* the Early Redemption charge (based on your specific product)

* interest due from date of last mortgage payment to date of redemption

Is that correct? If so, what is the issue?

If not, what exactly does the statement show?

You've also menationed 'insurance', though it's not clear what this means - do you insure the property with the mortgage lender? If so, you'll have to pay insurance up to the redemption date, and depending on the insurance product and whether you've paid annually in advance, may be due a refund. There may also be an admin charge for cancelling the insurance early.

You also mention £800, but you don't say which or the above elements this relates to. Or whether this is an additional charge for somthing else.

Finally, you say "If I paid a lump sum off would it reduce it?". Well, to redeem the mortgage (which is what a redemption statement assumes) you'll need to pay a lump sum!

Tiglet2

charleneann09 said:

Tiglet2 said:

charleneann09 said:

Hi I have received a mortgage redemption statement and on it interest has been added. I have to pay an early repayment charge but this is separate. Does anyone know what it's for? If I paid a lump sum off would it reduce it?

charleneann09 said:

Slithery said:

A ERC (Early Repayment Charge) is a payment that you owe your lender for ending the mortgage earlier than agreed to compensate them for the lack of interest you'll be paying.
This will have been clearly laid out in the terms you agreed to when taking out the mortgage.

I know about the ERC that's listed on there as well as the interest 

What exactly is your question?  

What does interest added mean on my mortgage redemption statement. It just says interest added £856

Your mortgage lender doesn't give you their money for free.  For every £1 that you borrow, you have to pay back £1 plus interest at whatever rate you agreed with them.