Fixed term ending - Would like to pay a lump sum

phyne2012

Hi,
My five year fixed term will be ending soon and I will be paying a lump sum of my mortgage then and will probably remortgage with a new lender. Can anyone let me know how this is done. I am thinking that the last month of my fixed term I can pay the lump sum without any ERC from my current lender and already have in place my new mortgage deal with another lender or will I have to wait for the lump sum to be paid before I can sort out my remortgage with a new lender. Just thinking that if the process takes a while I do not want to pay the variable rate to the current lender for a month or two.

Regards

Pete

kingstreet

Hand the funds to the solicitor conveyancer handling the remortgage and borrow less from the next lender accordingly.

JustDavid

Most lenders will let you pay off any size lump sum within a certain period of the rate ending. This will vary from lender to lender, and most likely, product to product as well. Simply contact your current provider and find out their time scales and allowances and you should just be able to transfer them the money and reduce the debt accordingly.

penners324

Remortgage can take 2 or 3 months. As said above organise it with the conveyancer

TBagpuss

You could arrange for the first Direct debit after hteh rate ends (or just before if your lender permits) to be larger to include the lump sum, but the simplest way is to remortgage for a lower amount and pay the lump sum to the conveyancer, in the same way you would if it was a deposit and you were biuying a new property. The solicitor will have to do anti monty laundering checks and is likely to require proof of the source ofthe funds so may aslk for bank statemnts to see that it's been regualr savings (or whetever it has been), but that shouldn't be a problem.

lukekelly19

Ours is a 25 year mortgage, coming to the end of it's first 2 years at a fixed term. The rates offered by our current provider aren't significantly different from other providers, so if we stay with our current provider, is there likely to be an opportunity to repay without penalty (ie more than 10% of yearly payment) at the end of the 2-year period? If so, how would we make sure it's paid 'in between' the two mortgage periods?
If we switch to a different provider, do we need to pay a conveyancer?

JustDavid

Again, you wouldn't do it with the conveyancer. Contact your existing provider and find out when you are able to pay a lump sum without any ERC's. Most lenders will let you pay off any amount within 30 days of your current rate ending.

lukekelly19

Thank you David!