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Not planning on porting mortgage, overpay before selling house to avoid ERC?
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t1redmonkey
Posts: 945 Forumite
I have about 6 years left on a 10 year mortgage, but I am selling my house and planning to only use part of the proceeds to buy my next place so I won't actually need a mortgage anymore. Unfortunately I have one of those sliding scale mortgages with charges if you redeem early depending on the amount left on the mortgage. I think mine is a 4% charge currently for the remaining balance. Seems like an obvious answer, but should I just try and overpay this as much as possible before the completion date to reduce the charge I have to pay? Or is there anything obvious I am missing here that makes this not a good idea?
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You aren’t missing anything. The lower the outstanding debt. The lower the ERC.1
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It's likely your mortgage only allows 10% overpayment each year....1
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Yes that is the case. But I was going to at least overpay the max amount within the 10% to reduce it as much as I can.penners324 said:It's likely your mortgage only allows 10% overpayment each year....0
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