ERC Skipton

diggingdude

Sorry to ask here but having spent 2 hours today on the phone/chat to Skipton without getting through I thought someone here might be able to answer my question. 

Origional loan £117000 in 2019 5 year fix. 
Renewed (product transfer) mortgage at £79000 march 2024 with Skipton 2 year fix. 

ERC is 1.25% it says the original loan amount. Am I right in thinking that's the 117k not the 79k when I took out the new fix? 

Any help would stop me screaming at the call centre if they ever answer. Affordability isn't the issue, I just like to know things. Thank you 

DE_612183

no it should be 1.25% of the balance when the new product was taken - that's what most do - although you need to check with Skipton ( sorry ) - did you get new mortgage doc when you changed product?

diggingdude

DE_612183 said:

no it should be 1.25% of the balance when the new product was taken - that's what most do - although you need to check with Skipton ( sorry ) - did you get new mortgage doc when you changed product?

Thanks for the reply. In all honesty I don't remember. It's strange for me as I'm a paperwork hoarder but for the life of me I don't remember/can't find it and there isn't anything I can see online.

Well it will be a nice suprise if it's the lower amount anyway

kingstreet

I'm looking at a Skipton offer and it says "1.25% of the balance at the date of repayment" in year two.

diggingdude

I'm a bit rubbish at this so that would be 1.25% of the balance now? 

amnblog

Yes, they cannot charge you 2.5% of debt that no longer exists.

It is 2.5% of the debt settled on the day you make the payment to settle some or all of the debt

diggingdude

Thank you, saved me another call on Monday 

DE_612183

amnblog said:

Yes, they cannot charge you 2.5% of debt that no longer exists.

It is 2.5% of the debt settled on the day you make the payment to settle some or all of the debt

Not all work this way - the penalty can be calculated on the debt at the start point - they could add this into the T&Cs as a amount but it's easier to say it's a % of the initial loan - Clydesdale do it this way.

MDMD

DE_612183 said:

amnblog said:

Yes, they cannot charge you 2.5% of debt that no longer exists.

It is 2.5% of the debt settled on the day you make the payment to settle some or all of the debt

Not all work this way - the penalty can be calculated on the debt at the start point - they could add this into the T&Cs as a amount but it's easier to say it's a % of the initial loan - Clydesdale do it this way.

So do first direct (although they also allow unlimited overpayments)

https://mortgages.firstdirect.com/mortgage-rates-fees/fees

amnblog

MDMD said:

DE_612183 said:

amnblog said:

Yes, they cannot charge you 2.5% of debt that no longer exists.

It is 2.5% of the debt settled on the day you make the payment to settle some or all of the debt

Not all work this way - the penalty can be calculated on the debt at the start point - they could add this into the T&Cs as a amount but it's easier to say it's a % of the initial loan - Clydesdale do it this way.

So do first direct (although they also allow unlimited overpayments)

https://mortgages.firstdirect.com/mortgage-rates-fees/fees

Some do, but we are talking about Skipton  

DE_612183

amnblog said:

MDMD said:

DE_612183 said:

amnblog said:

Yes, they cannot charge you 2.5% of debt that no longer exists.

It is 2.5% of the debt settled on the day you make the payment to settle some or all of the debt

Not all work this way - the penalty can be calculated on the debt at the start point - they could add this into the T&Cs as a amount but it's easier to say it's a % of the initial loan - Clydesdale do it this way.

So do first direct (although they also allow unlimited overpayments)

https://mortgages.firstdirect.com/mortgage-rates-fees/fees

Some do, but we are talking about Skipton  

Agreed - but I was replying to your statement that -  "they cannot charge you 2.5% of debt that no longer exists." which implies that there is a legal or regulation that stops them doing this, which is not the case.