Should I pay to end my fix early?

Mark_84

I have checked on my online account and the settlement figure is £174,000 on a mortgage of £165,000 so it seems the £8,500 fee is correct.

I guess it’s if it’s worth taking out a new mortgage for £174,000 or waiting until Early next year to try and lock in one of the mortgages 6 months before . With my current deal ending in September 2023 I should be able to lock one in from March but it depends what interest rates have done by then.

Is it worth asking a broker or is the fee too much to be paying to exit?

I was thinking more around monthly payments than mortgage debt. It’s a good point if interest rates goto 6% then mortgages will likely be higher than that as well.

CSL0183

Mark_84 said:

I have checked on my online account and the settlement figure is £174,000 on a mortgage of £165,000 so it seems the £8,500 fee is correct.

I guess it’s if it’s worth taking out a new mortgage for £174,000 or waiting until Early next year to try and lock in one of the mortgages 6 months before . With my current deal ending in September 2023 I should be able to lock one in from March but it depends what interest rates have done by then.

Is it worth asking a broker or is the fee too much to be paying to exit?

I was thinking more around monthly payments than mortgage debt. It’s a good point if interest rates goto 6% then mortgages will likely be higher than that as well.

You would be best speaking to them directly, if switching and taking out a remortgage with them they may be able to do something with the ERC. It does seem extortionate and is not the norm for fixes running down. I guess you would need to check your original paperwork also and make sure you are in your last year and what it says about the ERC to see if it’s on a sliding scale. Not sure what I would do personally as your ERC is a lot. 

Mark_84

I am thinking to hang fire until early next year. I have already budgeted for the potential increase. I don’t really want to add 8k to my mortgage.
I will try and find the paperwork in the meantime.

Orchid96

Hi @Mark_84, 

My situation is almost similar to yours - ERC of almost £10.5K.
Even though my ERC is 2%, my mortgage is for £530K.
I am still thinking of paying this ERC and move to a 10year product at 3% even though I have almost 16 months left in my current product (1.24%) - details are here - (https://forums.moneysavingexpert.com/discussion/6379178/should-i-pay-erc-of-10500/p1).

Jordanparly92

If I can jump on this too 

current balance 64,000 mortgage via Lloyds fix up for renewal August 23 

ive approached a mortgage advisor who’s recommended a 5 year fix via nationwide 

Current rate is 3.37 which increases to 4.24 

it’s the upfront fees that are giving me second thoughts personally 

the legal expenses are covered but we have 

650 to break my fix with Lloyds 
395 for the mortgage broker

and pro rata makes the first month nationwide payment 764

i really have no idea if renewing is the best option or not

if I just leave my fix to end what could my payments look like come next September 

Orchid96

Hi @Jordanparly92
You can add ERC to new mortgage.
There are many fee free mortgage brokers that you can use

Jordanparly92

Orchid96 said:

Hi @Jordanparly92
You can add ERC to new mortgage.
There are many fee free mortgage brokers that you can use

Thank you very much for that I’ve gone back to the mortgage advisor and asked about adding the exit fee to the borrowing amount 

CSL0183

Jordanparly92 said:

If I can jump on this too 

current balance 64,000 mortgage via Lloyds fix up for renewal August 23 

ive approached a mortgage advisor who’s recommended a 5 year fix via nationwide 

Current rate is 3.37 which increases to 4.24 

it’s the upfront fees that are giving me second thoughts personally 

the legal expenses are covered but we have 

650 to break my fix with Lloyds 
395 for the mortgage broker

and pro rata makes the first month nationwide payment 764

i really have no idea if renewing is the best option or not

if I just leave my fix to end what could my payments look like come next September 

How much is your current monthly payment and remaining term?

CSL0183

Orchid96 said:

Hi @Mark_84, 

My situation is almost similar to yours - ERC of almost £10.5K.
Even though my ERC is 2%, my mortgage is for £530K.
I am still thinking of paying this ERC and move to a 10year product at 3% even though I have almost 16 months left in my current product (1.24%) - details are here - (https://forums.moneysavingexpert.com/discussion/6379178/should-i-pay-erc-of-10500/p1).

The market has changed considerably since you started that thread. What is the current 10yr fix value if you were to look at that product today? 

They reckon 4% by year end and 6% by mid 2023 based on the Mini budget last Friday; the plunging £, the Gilt rate shooting up and inflation yet to peak. 

At least you have a 3% lock which is very good, you can see what happens between now and then. BOE next meeting early November Altho they may step in sooner if the £ plummets further. 

Jordanparly92

CSL0183 said:

Jordanparly92 said:

If I can jump on this too 

current balance 64,000 mortgage via Lloyds fix up for renewal August 23 

ive approached a mortgage advisor who’s recommended a 5 year fix via nationwide 

Current rate is 3.37 which increases to 4.24 

it’s the upfront fees that are giving me second thoughts personally 

the legal expenses are covered but we have 

650 to break my fix with Lloyds 
395 for the mortgage broker

and pro rata makes the first month nationwide payment 764

i really have no idea if renewing is the best option or not

if I just leave my fix to end what could my payments look like come next September 

How much is your current monthly payment and remaining term?

Hello currently monthly payment is £490 I have 14 years left on the term 11 month left on the fix

thanks