End of mortgage deal falling just before house sale

simon_or

penners324 said:

Are you sure the ERC on the new 2 year  is 1%? With Accord it's usually 3% for first year then 1.5% for the second year.

Probably a 2 year discount product.

simon_or

Notfarfromtheborder said:

simon_or said:

Notfarfromtheborder said:

First Direct Offset, no fee, there is an ERC if the mortgage is closed within the fixed rate period, however there is the facility to fully offset and therefore pay no interest

What's the point of an offset in this situation? If the OP had the cash to offset the mortgage, surely he'd just pay it off soon as it falls on to SVR.

My belief was that when the house sale goes through then the cash would be available to repay / offset the mortgage. The mortgage was needed between the end of June until completion of the sale. One of us has obviously misunderstood.

If he repays the offset mortgage, he'd incur an ERC, unless offsets are ERC free?

If he offsets the mortgage fully, he'd still have to port it to the new property to avoid ERC, wouldn't he?

Sorry I'm not trying to prove you wrong, just trying to understand why an offset would be in any way better than an ERC free product that he can simply pay off and close with no penalty, rather than go through the faff of porting over a fully offset mortgage.

Bizmarque

Yes it's a 2 year discount, 1% ERC for the duration.

I don't think offset will work for us.

I also don't think another lender will go for it considering we are SSTC.


Thanks very much for your thoughts. It's cleared it in my mind. I think sucking up the ERC is the only way, and maybe porting it at a much smaller amount may have legs.

As I said at the beginning this all boggles me. Now I am slightly less boggled...

Notfarfromtheborder

simon_or said:

Notfarfromtheborder said:

simon_or said:

Notfarfromtheborder said:

First Direct Offset, no fee, there is an ERC if the mortgage is closed within the fixed rate period, however there is the facility to fully offset and therefore pay no interest

What's the point of an offset in this situation? If the OP had the cash to offset the mortgage, surely he'd just pay it off soon as it falls on to SVR.

My belief was that when the house sale goes through then the cash would be available to repay / offset the mortgage. The mortgage was needed between the end of June until completion of the sale. One of us has obviously misunderstood.

If he repays the offset mortgage, he'd incur an ERC, unless offsets are ERC free?

If he offsets the mortgage fully, he'd still have to port it to the new property to avoid ERC, wouldn't he?

Sorry I'm not trying to prove you wrong, just trying to understand why an offset would be in any way better than an ERC free product that he can simply pay off and close with no penalty, rather than go through the faff of porting over a fully offset mortgage.

My offset has an ERC if repaid in the first 2 years if closed, however, I can l fully offset, pay no interest (once fully offset), and no ERC if closed after 2 years

Very useful as my purchase is probably 3 weeks ahead of my sale. In effect a very cheap bridging loan, just paying interest for 3 weeks (hopefully) if all goes to plan