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    • nickG
    • By nickG 12th Mar 18, 10:03 AM
    • 3Posts
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    nickG
    avoid early repayment charges
    • #1
    • 12th Mar 18, 10:03 AM
    avoid early repayment charges 12th Mar 18 at 10:03 AM
    Hi guys,

    The first question for me but I'm sure it must have been asked before.... I just can't find it.
    So I'm selling a house but I renewed the 2yr fixed term a few months ago.

    What I'm wondering is.... is it possible to sell the house but not pay off the mortgage?
    ie; perhaps pay off the majority of it but not all and avoid the early repayment charge? The mortgage is interest only so even if I paid the monthly repayment for the next year, it would still be cheaper than having to pay the early repayment charge!
Page 1
    • AnotherJoe
    • By AnotherJoe 12th Mar 18, 10:19 AM
    • 9,364 Posts
    • 10,319 Thanks
    AnotherJoe
    • #2
    • 12th Mar 18, 10:19 AM
    • #2
    • 12th Mar 18, 10:19 AM
    No it is not possible.
    You could look at "porting" the mortgage (or even just getting new mortgage) with the same lender, they may then waive the ERC. You'll have to ask them.
    • nickG
    • By nickG 12th Mar 18, 10:23 AM
    • 3 Posts
    • 0 Thanks
    nickG
    • #3
    • 12th Mar 18, 10:23 AM
    • #3
    • 12th Mar 18, 10:23 AM
    Yeah, I assumed they would have thought of everything to get your money and keep you from squeezing out of a loophole!.
    I cant port it or get a new mortgage because.... well, I don't need one. I'm trying to generally better my financial situation and become debt free. I just hate large charges! As do us all!
    • BoGoF
    • By BoGoF 12th Mar 18, 10:28 AM
    • 3,116 Posts
    • 2,387 Thanks
    BoGoF
    • #4
    • 12th Mar 18, 10:28 AM
    • #4
    • 12th Mar 18, 10:28 AM
    Hardly a loophole when you agreed to it when you took out the mortgage.
    • AnotherJoe
    • By AnotherJoe 12th Mar 18, 10:33 AM
    • 9,364 Posts
    • 10,319 Thanks
    AnotherJoe
    • #5
    • 12th Mar 18, 10:33 AM
    • #5
    • 12th Mar 18, 10:33 AM
    Some mortgages like this there is "sort of" a loophole in that you can pay a chunk off and the ERC is calculated on what is left.
    Eg extreme example, you owe 100k, you pay off 99k, then redeem mortgage paying ERC on 1k.
    You wouldn't be to do that coincident with house sale though you'd need to do it first perhaps witha short term loan. And not all mortgages will allow that most will have a maximum overpayment of say 10% a year.
    However i had a thought. You said "I cant port it or get a new mortgage because.... well, I don't need one. I'm trying to generally better my financial situation and become debt free" so are you downsizing? How about you do port the mortgage, you now have a big chunk of cash as well, and you continue paying the mortgage for two years and then pay it off with the cash once teh ERC period has ended? That would work if two years interest is less than the ERC.
    • Edi81
    • By Edi81 12th Mar 18, 10:47 AM
    • 451 Posts
    • 309 Thanks
    Edi81
    • #6
    • 12th Mar 18, 10:47 AM
    • #6
    • 12th Mar 18, 10:47 AM
    The mortgage provider isn!!!8217;t charging a fee just because they can.
    They have entered into a swap which would have a fee for them.
    This is why when fixing you need to be pretty certain that you will have the mortgage for the duration of the fix.
    • nickG
    • By nickG 12th Mar 18, 11:13 AM
    • 3 Posts
    • 0 Thanks
    nickG
    • #7
    • 12th Mar 18, 11:13 AM
    • #7
    • 12th Mar 18, 11:13 AM
    I'm not downsizing.

    I've got two houses currently.
    I'm selling one to take the equity and then buy some land (theoretically). At which time, the plan is to chase planning for a while and hopefully build my own house mortgage free.

    So I'll still have one house but I've also recently renewed the mortgage on that one too.
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