Early repayment charge more than interest left on the mortgage

EimearF

Hi I will soon have enough money to clear my mortgage however I stupidly took a 5 year fix with a 5% erc. The erc is now more than I’ll pay in interest for the whole mortgage not just the fix period. Has anyone has success getting the erc reduced to just interest owed? I want the mental freedom of being mortgage free but it’s irking me it would cost more than letting it run! 

dimbo61

Can you not just pay off 10% each year ?
Reduce the mortgage debt down as much as possible without incurring ERC,s 
Which lender is it ?

Snookie12cat

No, that's what an ERC is. Just pay down to a low as you can without paying it off

YBR

I have been in that position for a while. Having done the arithmetic I've been putting our overpayments towards reducing monthly payments rather than reducing the term.
It's good enough to know I'm mortgage neutral for now.

EimearF

I have been paying the 10% allowed by Santander each year and I shortened the term so have less than 5 years left. My worry about mortgage neutral is I have in my head the money is there and think I’m rich! The interest v ex charge difference is a few hundred so might be worth just doing for the sense of freedom but I’d rather just pay the interest balance instead! 

dunstonh

 I want the mental freedom of being mortgage free but it’s irking me it would cost more than letting it run! 

There is no logic in that though.

Has anyone has success getting the erc reduced to just interest owed?

Santander by any chance.... No would be the answer and that is a fair outcome too.

EimearF

the logic is that I’ll have no mortgage so I can reduce my hours at work and see my daughter more. Having the money in a savings account runs the risk of it getting used up if I’m dipping in all the time for monthly payments and think I can afford to buy other things too. 

Just numbers it doesn’t make sense but there is a lot of psychology in money management and I know how much getting debt free changed my life so mortgage free will likely be similar. 

Bluebell1000

Can you put the money in a fixed rate savings account that matures just before the end of the fix?

EimearF

I thought about fixed rate savings but what I want to do is reduce my hours at work to be with my daughter and cutting out that big monthly payment will allow me to do that even though it may hurt paying the fee. 

ACG

Put the balance of all of your repayments in a separate account and then change the DD to that account. 
Whatever is left in your main account is your money. 

Santander are usually one of the cheaper lenders, but everything comes with a cost and with Santander it is the ERC being higher than most lenders. 

getmore4less

^^^^^^^
link the mortgage to the money separate from everything else  and forget about it