Early Repayment fee but fixed rate ends

IvanDrago

Hi

i am changing my mortgage from Accord to HSBC as my fixed rate ends on 31st October so I assumed I wouldn’t have to pay an ERC but on the redemption letter accord gave charged me £1018.

If I jus5 wait until 1st of November will I get away without having to pay?

On-the-coast

Don’t assume anything. 

Read your contract terms & conditions. 

No one here knows what you signed. 

MorningcoffeeIV

You won't 'get away' with anything, but will charged according to the terms.

If you wait until the fixed period expires, there'll be no ERC.

IvanDrago

So I’d have to pay Novembers mortgage payment on the new SVR rate as I can’t use my new mortgage until I get the redemption figure. 

Might as well just leave it 

ACG

ERCs are usually charged up until the last day of the month. The day after would normally mean no ERCs. But as has been said, it will depend on what your offer says. 

user1977

IvanDrago said:

So I’d have to pay Novembers mortgage payment on the new SVR rate as I can’t use my new mortgage until I get the redemption figure. 

Might as well just leave it 

Interest is worked out on a daily basis, you wouldn't be paying SVR for the whole of November unless you redeem on 30 November.

What date was the redemption statement calculated for?

IvanDrago

Redemption statement was calculated today.

my fixed rate ends 31/10/22 so my next payment if I didn’t get a new deal on 1st nov is on the accord svr. 

housebuyer143

IvanDrago said:

Redemption statement was calculated today.

my fixed rate ends 31/10/22 so my next payment if I didn’t get a new deal on 1st nov is on the accord svr. 

The redemption statement was calculated today so it will include the ERC as, as of today that would be due. 
You can get a new redemption statement on 1st Nov and it won't be on there.

IvanDrago

Yeah that's what i am going to do.

Just seems weird that my fixed rate term doesn't end the day after my last payment on the fixed rate, by making it the end of the month it means i have to pay 1 payment on the SVR and make my new mortgage start on 1st Dec. 

I guess they just hope people will just pay the charge

user1977

IvanDrago said:

Just seems weird that my fixed rate term doesn't end the day after my last payment on the fixed rate, by making it the end of the month it means i have to pay 1 payment on the SVR and make my new mortgage start on 1st Dec. 

It doesn't. You can complete on 1 November (or any other date afterwards), not pay the ERC, and not pay the SVR for the whole of November. If you overpay because your direct debit has already gone out then you get a refund afterwards. Like I said, the interest is calculated on a daily basis, not whole months. 

kingstreet

The redemption statement should state a last payment date, probably 1st October with an instruction to solicitor that if completion takes place after 31 October, the ERC can be removed.

If you pay previous lender on 1 November, the payment will come back to the same account about two weeks later.