Paying off a mortgage - when to pay?

lvm

Trying to avoid phoning and going through 16 different IVR call options!

So, I have 2 mortgages coming to the end of the fixed rates so given current situation I’m just going to pay them off.

First one ends 31st July and can’t get a redemption statement for that date until 4 weeks in advance (which is fine) but what happens when it comes to pay it off? Do I have to make sure the payment is made on 31st to avoid the ERC? Or can I pay it at any time in the 4 weeks prior and the lender will just apply it on 31st July (or 1st August?) Trying to avoid paying the 7.49% SVR so preferring not to go even a few days into that!

housebuyer143

lvm said:

Trying to avoid phoning and going through 16 different IVR call options!

So, I have 2 mortgages coming to the end of the fixed rates so given current situation I’m just going to pay them off.

First one ends 31st July and can’t get a redemption statement for that date until 4 weeks in advance (which is fine) but what happens when it comes to pay it off? Do I have to make sure the payment is made on 31st to avoid the ERC? Or can I pay it at any time in the 4 weeks prior and the lender will just apply it on 31st July (or 1st August?) Trying to avoid paying the 7.49% SVR so preferring not to go even a few days into that!

You must not pay it off until after the fixed rate expires so wait for the next day to do it, not the 31st.

K_S

lvm said:

Trying to avoid phoning and going through 16 different IVR call options!

So, I have 2 mortgages coming to the end of the fixed rates so given current situation I’m just going to pay them off.

First one ends 31st July and can’t get a redemption statement for that date until 4 weeks in advance (which is fine) but what happens when it comes to pay it off? Do I have to make sure the payment is made on 31st to avoid the ERC? Or can I pay it at any time in the 4 weeks prior and the lender will just apply it on 31st July (or 1st August?) Trying to avoid paying the 7.49% SVR so preferring not to go even a few days into that!

@lvm

On or before 31st July - you can overpay up to the penalty-free overpayment allowance without any penalty. What the allowance is will depend on the lender - it can range from 10% of original mortgage balance (eg: Nationwide) to 10% of mortgage balance on 1st Jan 2023.

After 31st July (or whatever the fix end date is) - you can pay off the whole thing with no penalty. If the fix end date is 31 July and you pay it off on 1st August, I assume at most you'll be charged one day's interest at SVR, but hopefully none at all!

kingstreet

When you say two mortgages, do you mean two sub-accounts reflecting different tranches of borrowing taken at different times secured on the same property?

If so, ensure you tell your lender which sub-account you want to reduce/repay as the funds may not be allocated correctly if you simply ask for it to be credited to your principal mortgage account number.

lvm

Thanks all!

@kingstreet - 2 properties rather than 2 mortgages on same property.

Looks like it’ll be a 1st August job then!