Paying off a lump sum between fixed rates (product transfer) avoiding ERC
in Mortgages & endowments
3 replies 197 views
My current 5 year fix ends 31st December this year. Intention is to lock in a new fixed rate sometime in the final 6 months (as per what my lender, NatWest allows). I may, or may not want to pay off a lump sum overpayment (beyond my current 10% annual overpayment allowance) at the same time. I obviously want to avoid paying any ERC penalty. Is this going to be possible, or is the only solution to wait until my current fix ends, go onto variable rate, make the overpayment, and then apply for a product transfer (new fixed rate)? Or does NatWest give a window of opportunity at the start of the new fixed rate to make a penalty free overpayment? The lump sum could be a significant amount maybe up to 50% of my mortgage balance.
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If your paying 50% off the need to get the very best fixed rate might not be that important
So maybe look at an Offset mortgage
As an example, Skipton allows unlimited ERC-free overpayments in the final month of a deal even if a product transfer is arranged to start the day after the current deal ends.