Paying mortgage in full when term comes to an end - charges?

PenguinForever

Hello,

I have a mortgage with Nationwide, 2.09% coming to an end 29th February. It has £52,984 on it at the moment.

I have already used my repayment allowance without charge this year. 

I have been told that in the month of February (one month before deal comes to an end) I can pay off any amount off the mortgage without charge. Does this sound right?

If so, my plan is to save up, and try and pay off as much as I can.

There is a chance that I would be able to save the full amount, so be in a position to pay the mortgage in full at the end of the mortgage term and therefore, not need to get a new deal. Does anyone know if I do pay off the full mortgage when the mortgage deal ends if I’ll be charged in anyway?

I'm not sure if this is relevant, but I have another mortgage on the property (around 27k) which I’ll still have (it’s in the middle of a 5 year fix at the moment)

pramsay13

You can either look at your mortgage agreement or speak to Nationwide to check for early repayment charges.
There would normally be an early repayment charge if you are in the middle of a fixed rate, although it often reduces the closer you get to the end.
Check with Nationwide but I imagine the best option will be to make a bank transfer for the full amount on the 29th February or 1st March. 

MWT

pramsay13 said:

Check with Nationwide but I imagine the best option will be to make a bank transfer for the full amount on the 29th February or 1st March. 

If the fixed rate ends on the 29th, I would suggest the first safe day is 1st March, unless Nationwide confirm an earlier date is OK...

Brie

Definitely have it in writing from Nationwide when you can pay it off for free.  My mortgage T&Cs very unhelpfully state that there's a £75 charge for paying off and closing the mortgage at any time unless that wasn't in the original terms.  So essentially I'll have to go back to the paperwork signed when applying over 20 years back to ensure I don't get charged as I doubt someone working at my bank will know about any exclusions.  

Edi81

Do you really have two mortgages or one with two sub accounts? Who is the second one with?

Marmot

Yes, Nationwide allow you to overpay in the last 30 days of a fixed deal without penalty... I have just done this (made large overpayment before switching to another lender for a new fix.  It doesn't seem to be written down anywhere on either their website or on the mortgage offer you take out with them but when you call them they will confirm that it is the case.  

I was quite nervous that it couldn't possibly be true but they assured me that it was & that their phone calls are recorded so there would be a record of them confirming that no ERC would be applied.  I then also set up my new fix to start on the final day of my fix with Nationwide because I knew I couldn't incur an ERC by the remortgage settling my full balance with them.

There is also a small charge for clearing the full amount (£65 I think) if your outstanding mortgage balance is above a certain value...but that is definitely stated in your mortgage documents.

jrawle

Marmot said:

There is also a small charge for clearing the full amount (£65 I think) if your outstanding mortgage balance is above a certain value...but that is definitely stated in your mortgage documents.

The £65 "Mortgage exit fee" is not payable if there are less than 10 years remaining on the mortgage term.

PenguinForever

Thank you so much guys for your help!

Zoe02

Best to contact the bank.