Help with a calculation please!

edited 9 February 2019 at 8:01PM in Mortgage-Free Wannabe
2 replies 348 views
jimblob_2jimblob_2 Forumite
5 Posts
edited 9 February 2019 at 8:01PM in Mortgage-Free Wannabe
As a MFW, and nearly there, I have a question. I have enough money saved to pay off my balance, however...

Am I better off paying off the balance now or in December, which is the last month of my fixed rate?

balance is 59,795 at 2.99% apr. I am paying 373.09 p/m.
If I repay now, I have an ERC of 1794.15 and an exit charge of 200
Remaining term is 17yrs 10 month.

If I repay in December, I don't have an ERC to pay (last month of fixed rate deal), but as the ERC until then is 3%, I am not sure if it makes any difference either way.

Thanks in advance!


  • miss_undastoodmiss_undastood Forumite
    226 Posts
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    For arguments sake let’s say there’s 10m difference

    2.99% interest for 10 months is 2.49% interest you’d pay if you waited
    (2.99% /12 x10)

    So you’d save 0.51% by repaying in December - there is perhaps £300 in it but obviously your balance will decrease slightly by December. Also by saving the money you’d get some sort of return too

    There isn’t much in it as the ERC and interest rate are similar
    Part time working mum of 2 terrors trying to build financial freedom.

    Residential Mortgages @ Oct 2020: £308,283
    @Jul 2021 £286,600
    MFW-21 #20
    MFIT-T5 #46
  • Really appreciate the reply. My savings to pay this off are doing very little, mostly in premium bonds, so it makes sense to me to clear the mortgage. Thanks
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