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Clearing mortgage
flossymcfly
Posts: 75 Forumite
My husband and I are in the lucky position that we are able to clear our mortgage within the next couple of months. It has 29 years left to run and we are on a fixed term rate until May 2026.
What do we need to do? We are with Halifax so I am assuming we need to contact them to get a settlement figure, but what happens once we've sent them the money? Is that it? I'm thinking not but no idea where to start!
We didn't think we would be in this position so it's still a bit of a shock, but eternally thankful.
What do we need to do? We are with Halifax so I am assuming we need to contact them to get a settlement figure, but what happens once we've sent them the money? Is that it? I'm thinking not but no idea where to start!
We didn't think we would be in this position so it's still a bit of a shock, but eternally thankful.
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Comments
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What interest rate are you paying? If lower than 4% wait until end of May, no early repayment then as well!0
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We're on 5.75%jackrack said:What interest rate are you paying? If lower than 4% wait until end of May, no early repayment then as well!
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Can't help. But congratulations on being able to settle this so early. Plenty of time now to pop that excess cash into your pensions, ISAs, etc.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Ask Halifax for a redemption figure for a specific date, send them the money for that date.
The process for discharging the security registered against the property depends on which country the property is in and how it's registered, it might be dealt with by the Halifax or you might need to action it yourself.1 -
still probably better to wait, early redemption charges can be extremely high !1
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check on what lump sum payments you can make each year without penalty - it may be worth making one payment without penalty then a balancing one for the rest. Speak to a mortgage advisor in Halifax..
Also work out the interest you will pay in the next 12 months versus the penalty payment - it may be worthwhile waiting until the fixed rate deal runs out.1 -
If the mortgage product runs until May 2026, the early repayment charge will currently be 2% of the loan amount being repaid. On 1 June 2025, that will fall to 1% of the loan amount being repaid, effectively cutting it in half.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.2
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Thanks, this is really interesting. Is this the actual percentages for Halifax or is this just a general guide?kingstreet said:If the mortgage product runs until May 2026, the early repayment charge will currently be 2% of the loan amount being repaid. On 1 June 2025, that will fall to 1% of the loan amount being repaid, effectively cutting it in half.
We would be paying more in interest than we would make sitting in a savings account (especially with all this Tariff business at the moment) so would make sense to pay once we hit the 1%, would be less than £1200 that way!
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Halifax ERCs are usually 5/4/3/2/1, 3/2/1 or 2/1 depending on the product selected initially. That suggests in the second to last year you will pay 2% ERC and in the final year, 1% and if the product ends on 31 May 2026 the ERC will reduce from 2% to 1% on 1 June 2025. Check your documentation to make sure, of course.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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It's a general guide but most are the same - you can check your mortgage details - it should be on there the Early Repayment Charges0
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