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Paying off a lump sum at end of fixed deal
isaadvice
Posts: 14 Forumite
Our deal is ending in December.
We've had offers through from the current lender and we think we'll take one of them.
It's a slightly higher rate than other lenders, but much easier to stick with them than go through the hassle of application/valuation/proof of funds/income etc just for the sake of saving a few £100s.
We also have a lump sum to knock off the mortgage (£50k of the remaining £175k) but we also have an ERC of 1% and the maximum overpayment allowed is £1k a month.
How is this usually handled when staying with the same lender?
Do we let fix expire, go onto SVR for 1 month, pay lump sum, then switch to a fix?
How about moving to another lender?
We spoke to L&C and asked them this and the particular broker we were assigned seemed to suggest there's no way to avoid ERC as you'd pay it with current lender now or new lender when you start. This seems like nonsense to me, I wasn't really impressed by this particular broker, but previously been really happy with L&C.
We've had offers through from the current lender and we think we'll take one of them.
It's a slightly higher rate than other lenders, but much easier to stick with them than go through the hassle of application/valuation/proof of funds/income etc just for the sake of saving a few £100s.
We also have a lump sum to knock off the mortgage (£50k of the remaining £175k) but we also have an ERC of 1% and the maximum overpayment allowed is £1k a month.
How is this usually handled when staying with the same lender?
Do we let fix expire, go onto SVR for 1 month, pay lump sum, then switch to a fix?
How about moving to another lender?
We spoke to L&C and asked them this and the particular broker we were assigned seemed to suggest there's no way to avoid ERC as you'd pay it with current lender now or new lender when you start. This seems like nonsense to me, I wasn't really impressed by this particular broker, but previously been really happy with L&C.
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Comments
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If you are remaining with the same lender, they may give a window of perhaps two weeks to make an overpayment in excess of the ERC-free limit as a product nears expiry. You'll need to contact the lender to ask. Unless they did this, L&C probably won't know the answer.
As an example, we had a recent Precise case where the borrower had ten days to the expiry date to make an ERC-free overpayment.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Call the mortgage company0
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Who is the Lender here?I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
West Brom, and yeah I've contacted them and waiting for a call back.
But also wondering how the process works if we do move away from them, I'm sure it's possible to borrow less and make up the difference with cash.0 -
You give the difference to the solicitor handling the transfer and he adds that to the new mortgage funds and repays the current mortgage.isaadvice said:West Brom, and yeah I've contacted them and waiting for a call back.
But also wondering how the process works if we do move away from them, I'm sure it's possible to borrow less and make up the difference with cash.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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