Mortgage over payments after the end of the years of penalty

Luke451

Hi,

I'll have a mortgage of 10% max over payment in 1y, up to 5y, but what happens when those 5y end and I remain with the same mortgage provider?

Will I have other penalties (that I don't see right now)??

On the other hand, I may be forced to remortgage, I'm talking about a difference between 5.5 and 8% interests rate when my 5y fixed will end, based on the current evaluation.

In order to avoid that crazy situation, I have a couple of plans:

1. Remortgage for a decent rate, but also the same lender can propose another 5y fixed, or they never do it and let it run with variable rate??

2. Put down a big chunk of money and remain with the same lender (kind of 70% mortgage debt paid), but as far as I know, I won't have any additional penalties after 5y and I probably know why, most of the interests are paid the first 3y ...............................

So, What's the best? Or better, which one is true? Will I have additional penalties?

Hoenir

All will depend on the product you opt for once the 5 year fix ends.  

born_again

Luke451 said:

Hi,

I'll have a mortgage of 10% max over payment in 1y, up to 5y, but what happens when those 5y end and I remain with the same mortgage provider?

Will I have other penalties (that I don't see right now)??

On the other hand, I may be forced to remortgage, I'm talking about a difference between 5.5 and 8% interests rate when my 5y fixed will end, based on the current evaluation.

In order to avoid that crazy situation, I have a couple of plans:

1. Remortgage for a decent rate, but also the same lender can propose another 5y fixed, or they never do it and let it run with variable rate??

2. Put down a big chunk of money and remain with the same lender (kind of 70% mortgage debt paid), but as far as I know, I won't have any additional penalties after 5y and I probably know why, most of the interests are paid the first 3y ...............................

So, What's the best? Or better, which one is true? Will I have additional penalties?

Yes, most will do refix for another period & it is a quick & easy option, as it does not require any proof of income etc. Did that with ours this year. Just in time before rates shot up 👍

Luke451

born_again said:

Luke451 said:

Hi,

I'll have a mortgage of 10% max over payment in 1y, up to 5y, but what happens when those 5y end and I remain with the same mortgage provider?

Will I have other penalties (that I don't see right now)??

On the other hand, I may be forced to remortgage, I'm talking about a difference between 5.5 and 8% interests rate when my 5y fixed will end, based on the current evaluation.

In order to avoid that crazy situation, I have a couple of plans:

1. Remortgage for a decent rate, but also the same lender can propose another 5y fixed, or they never do it and let it run with variable rate??

2. Put down a big chunk of money and remain with the same lender (kind of 70% mortgage debt paid), but as far as I know, I won't have any additional penalties after 5y and I probably know why, most of the interests are paid the first 3y ...............................

So, What's the best? Or better, which one is true? Will I have additional penalties?

Yes, most will do refix for another period & it is a quick & easy option, as it does not require any proof of income etc. Did that with ours this year. Just in time before rates shot up 👍

Have you got the same 10% max of over payment yearly?

Also, in case I remortgage, do you know if I can put down more money? (like a deposit the first time I got the mortgage)

EssexHebridean

Yes, you can let your mortgage run over to the SVR, then pay a chunk off. You can then either continue on the SVR or take a new fix, depending on what suits you better at the time.

Luke451

EssexHebridean said:

Yes, you can let your mortgage run over to the SVR, then pay a chunk off. You can then either continue on the SVR or take a new fix, depending on what suits you better at the time.

Is it possible to go with the SVR, pay a lump sum, then re-enter in a fixed agreement?
I'm just trying to avoid the same rule of 10% with the new fixed mortgage.

silvercar

Luke451 said:

EssexHebridean said:

Yes, you can let your mortgage run over to the SVR, then pay a chunk off. You can then either continue on the SVR or take a new fix, depending on what suits you better at the time.

Is it possible to go with the SVR, pay a lump sum, then re-enter in a fixed agreement?
I'm just trying to avoid the same rule of 10% with the new fixed mortgage.

Yes. You can do exactly that. Book the new rate to start a few days after the old rate ends and pay off a lump sum during those few days on svr.