Selling house and paying early redemption charge

MarkyMarkD

I think it's fairly unwise to throw away almost half of the money you've made on the second property in redemption penalties. You'll also incur significant costs in estate agency fees etc. - but then you'd incur them if you wanted to buy a bigger house in a few years any way.

The other point is that a 5 year fixed rate, taken out 3 years ago, is likely to be very cheap indeed compared to current rates. It's a shame to throw away what is now a bargain mortgage.

Gorgeous_George

... unless houses prices ccccccccccccccc......



GG

marc5180

If the redemption fee is a few thousand pounds then i wouldnt want to pay it although we do not want to stay in the house that we are in for another 2 years because it is far too small. Ideally we want to sell and rent for a few years hoping that the house market crashes in this time.....but we know it probably wont......so we will be saving as much as we can in this time ready when we see a house that we fancy investing in.
Dont really want to wait another 2 years though

MarkyMarkD

It definitely will be a few thousands pounds. NR's penalties are at the upper end of the normal range and a "normal" penalty is around 3% which would be over £3k in your case.

You shouldn't have bought a house on a 5 year fixed rate mortgage if you didn't intend to be there for more than 5 years.

marc5180

Well hindsight is a wonderful thing isnt it.

MarkyMarkD

Well, you haven't explained why your needs/wants/aspirations have changed over three years, in a way which you couldn't have predicted three years ago.

You don't need hindsight; you simply need to plan in a way which includes sufficient flexibility for eventualities which are likely to happen.

clutton_2

read your terms and conditions thoroughly, if your mortgage is "portable" - ie if you can transfer it to another property, you may be able to get a reduction in the Early Repayment Penalties - but without reading your T&Cs no one here know what they say, so all of this advice is guess work !!!

sunshine_shell

I borrowed 85K and i want to sell up and move closer to my parents but i'm waiting till my fixed term is over otherwise i have to pay the full 85k back and loose the money i have payed off

whowants2brich

Marc5180 - an alternative suggestion:

Rather than losing £2k-£4k by moving, why not rent the place for two years until your fixed term is up? You might be able to get some tenants to pay your mortgage amount (if you're lucky, even a bit more) and then you'll be saving the redemption fee... you'll even make a profit if the price of the property rises over the next two years.

Alternatively, if you think prices will fall over the next two years, then sell as soon as you can, as the potential loss could be much greater than the £4k that you could save...

Your choice - good luck!

whowants2brich

PS As someone else said, a 5-year fix taken 3 years ago must be at a great mortgage rate, it'd be a shame to waste it unless you really have to - ie if you really must move and if you can't get any tenants... Only you can decide!

marc5180

Phoned Northern Rock who explained that we would have to pay an early repayment fee of £2800 plus a help with cost fee of £1000 and a discharge fee of 250 pounds so all in all over £4000.
Whowantstoberich - we have thought about renting but thought that we would have to change our mortgage to a buy to let, then theres the landlords insurances and i imagine a lot of hassle and don't really want to go down that route but then again we dont want to stay in the house for another 2 years, so we dont know what to do now