Early exit fee on new mortgage when selling house issue 1 November 2022 at 9:44AM edited 1 November 2022 at 10:01AM in Mortgages & endowments 2 replies 192 views

Croissant

We have just got a buyer for our rental property. The mortgage runs out on the 31st Dec. The sale will probably take until February 2023. We had already arranged a mortgage from 1st Jan to fix on lower rates before we decided to sell but it does mean an early exit fee of £5,000. Are there any other ways to avoid this or diff types of mortgages to tied us over for 2 months until the sale? 

Also as this is a second property twe will therefore pay on the profit from the sale. The estimated profit after removing costs is approx £80,000. It is owned by my civil partner and myself. We both earn £22,000 each a year. Does this take us both into the 28% tax bracket each meaning we both pay 28% each on our profit of £40,000 or do we pay 18% each. Is there anyway to reduce the amount of Capital Gains Tax. Thank you for your time

ACG

Can you not just ask the lender to cancel the product transfer? Then sit on the standard variable rate until the property sells? 
As for the reducing your tax bill with the fee, you should probably take advice from your accountant. 

Big_Rock

Croissant said:

We have just got a buyer for our rental property. The mortgage runs out on the 31st Dec. The sale will probably take until February 2023. We had already arranged a mortgage from 1st Jan to fix on lower rates before we decided to sell but it does mean an early exit fee of £5,000. Are there any other ways to avoid this or diff types of mortgages to tied us over for 2 months until the sale? 

Also as this is a second property twe will therefore pay on the profit from the sale. The estimated profit after removing costs is approx £80,000. It is owned by my civil partner and myself. We both earn £22,000 each a year. Does this take us both into the 28% tax bracket each meaning we both pay 28% each on our profit of £40,000 or do we pay 18% each. Is there anyway to reduce the amount of Capital Gains Tax. Thank you for your time

If you have not completed on product transfer should be no ERC ... talk to them .