early repayment charges- confused??

merchantofvenice

hello mfws!!

we are in the position to make overpayments on our mortgage, we are however, on a fixed rate and of course early repayment charges to deal with.

What i am confused about is does "early repayment" mean paying off the mortgage in full, or does it mean any amount over the monthly payment??

In other words, if we paid an extra £800 a month, would we incur any charges?

Sorry if I am being dense, but i can't find anything on our paper work that answers this question

jonathon_hart

Why don't you phone them and ask them?

Different companies have different allowances, Abbey allows 10% of the mortgage amount to be overpaid each year, Nationwide allowa £500 per month etc.

Jonbvn

Most mortgages ERC's mean any payment in excess of the standard monthly payment.

Note that some fixed rate mortgages do allow some penalty free overpayments. I know HSBC allows 20% overpayment per month, A&L allows 500pcm etc. You need to contact your lender to confirm the situation.

aliportico

It really depends on the T&C. Best to talk to them if you can't find anything about it. For instance, on our fixed rate mortgage, we can overpay by £500 a month, but if we repay the whole thing before the term is up, we have to pay an extra charge of 3% (iirc) on the amount overpaid. (Goes some way towards making up for them 'losing' the interest, but is still cheaper for us!)