Paying off my mortgage

PierremontQuaker03

Hi, I am in the fortunate position where I an pay off my mortgage. My deal ends on 31st December this year. I know there is a redemption fee of a few hundred pounds when I pay if off, but as I am approaching 3 months until the end of the term I am wondering if I can pay it off earlier without incurring any other fees?

la531983

You would need to check if your current deal has any early repayment charges, I would almost certainly say it would (most fixes do). In any case you would need to ask your bank for a redemption figure if they have these charges or not, so the quick way is to ask them - nobody on here can give you a 100% accurate answer.

Banksy_2

PierremontQuaker03 said:

Hi, I am in the fortunate position where I an pay off my mortgage. My deal ends on 31st December this year. I know there is a redemption fee of a few hundred pounds when I pay if off, but as I am approaching 3 months until the end of the term I am wondering if I can pay it off earlier without incurring any other fees?

Hi PQ03 (Darlo fan?) - I'm also in a similar position where I've been looking at paying off early, but have decided that to avoid any extra repayment charge (and I've listed what the HSBC do on the same question below), I'm going to use the money I could put towards repaying it, into an account that allows me to do a bit of bank switching and make more off it. 

My repayment charges end on Sept 30th, so on October 1st I'll be requesting a redemption figure and transferring all of that saved money into the final payment that's needed.

HSBC info (assume it's the same or at least similar to other banks):

Your early repayment charge is 1% of the amount paid over your annual overpayment allowance for each remaining year of the fixed rate. This amount reduces on a daily basis. 

The exception to this is the 10-year fixed rate, where the early repayment charge will be a maximum of 5% over your annual overpayment allowance for the first 6 years and will then reduce by 1% each year. 

Example:

You exceed your annual overpayment allowance by £10,000 with 493 days remaining on the fixed rate

£10,000 x 1% ÷ 365 x 493 = £135.07 early repayment charge.