Mortgage advice

sheffielder123

hi there,

me and my partner bought a house for £85000 a year ago - paid 5% deposit and had an interest free mortage fixed rate 6.25 for first 2 years. Our circumstances have changed and we can now afford to pay more each month but after reading the mortage acceptance letter it says each overpayment gets a £50 admin charge making it pointless overpaying.

Can we switch our mortage provider wivout penalty and is it worth doing in the current market?

we currently pay £423 a month, and could probably go to 600-700. Any advice?

Ma77hew

I would guess that you probably have an early repayment charge for the period of the deal, which would mean if you switch mortgage you would be charged this fee.

The best thing to do would be to save the money you were planning on overpaying and then when the deal runs out you can introduce that to reduce your capital as well as remortgaging to somewhere that won't charge that much for overpayments.

Suggest you check your paperwork for early repayment charges or contact your mortgage provider.

zavarony

Hi Sheffielder123

We have just remortgaged with the intention of pating off our mortgage early but aren't allowed to overpay for the 1st 2 years. I have set up an ISA and am paying my 'overpayments' by standing order into it every month so that at the end of the 2 years, not only will I have the savings to pay off the mortgage but also the interest from them too.

If you havent used up your ISA allowance yet for this year it may be the way forward???

Have you seen the 2008 MFW newbies thread, started by bellsbells? Theres loads of ideas on there to help you pay off early and bellsbells will also keep a track of how much you are overpaying - its a great incentive to keep up with the additional payments..
Hope that helps???
Zav

dimbo61

hi sheffielder123
barclays are paying 6.5% on there ISA at the moment so save into
that £300 a month and pay a lump sum off the mortgage when your fixed rate ends ! is as that GOOD LUCK