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  • FIRST POST
    • langtonhighway
    • By langtonhighway 14th Jun 19, 3:43 PM
    • 25Posts
    • 10Thanks
    langtonhighway
    redemption penalty or pay it off?
    • #1
    • 14th Jun 19, 3:43 PM
    redemption penalty or pay it off? 14th Jun 19 at 3:43 PM
    I have made a decision to sell my house. Sadly, I didn't make the decision 6 months ago, as I am now 6 months in to a 2 year deal. But nevertheless, my decision has to stand. Now, I have sufficient equity in my home to pay off my mortgage (owned it 25 years), and buy my daughter a much smaller property, and have a bit extra cash in the bank. (yes, I realise how lucky I am)

    My question is, should I take the hit of the redemption penalty which will be around 3600, or should I port the mortgage to the smaller property and continue paying the mortgage until the expiry date.

    This would mean I pay the mortgage amount of around 700 for another 15 months (eg 10500 ish).

    It seems to me that paying the mortgage off would be the best option, but my partner insists I should wait til my deal runs out. Am I missing something?

    thanks
Page 1
    • fresh cotton
    • By fresh cotton 14th Jun 19, 9:31 PM
    • 31 Posts
    • 67 Thanks
    fresh cotton
    • #2
    • 14th Jun 19, 9:31 PM
    • #2
    • 14th Jun 19, 9:31 PM
    How much is the penalty in terms of percentage and what's the interest rate ?
    • Fizzy11
    • By Fizzy11 14th Jun 19, 9:52 PM
    • 124 Posts
    • 301 Thanks
    Fizzy11
    • #3
    • 14th Jun 19, 9:52 PM
    • #3
    • 14th Jun 19, 9:52 PM
    I’m no expert but I’m assuming you have no other ‘debt’ so personally it all depends on your preference but you need a clever person to work out whether you’re paying more in interest over the 15 months than the redemption penalty if you redeem it now.
    • SparkyGrad
    • By SparkyGrad 17th Jun 19, 11:16 AM
    • 84 Posts
    • 94 Thanks
    SparkyGrad
    • #4
    • 17th Jun 19, 11:16 AM
    • #4
    • 17th Jun 19, 11:16 AM
    Do you know what your balance and interest rate on the mortgage is right now?

    To pay it off now you'll pay the balance plus the redemption charge, to pay it off later you'll pay the balance plus 15 months' interest. Without having numbers to do the maths on, we can't really help.
    • getmore4less
    • By getmore4less 18th Jun 19, 2:46 AM
    • 37,390 Posts
    • 23,069 Thanks
    getmore4less
    • #5
    • 18th Jun 19, 2:46 AM
    • #5
    • 18th Jun 19, 2:46 AM
    I have made a decision to sell my house. Sadly, I didn't make the decision 6 months ago, as I am now 6 months in to a 2 year deal. But nevertheless, my decision has to stand. Now, I have sufficient equity in my home to pay off my mortgage (owned it 25 years), and buy my daughter a much smaller property, and have a bit extra cash in the bank. (yes, I realise how lucky I am)

    My question is, should I take the hit of the redemption penalty which will be around 3600, or should I port the mortgage to the smaller property and continue paying the mortgage until the expiry date.

    This would mean I pay the mortgage amount of around 700 for another 15 months (eg 10500 ish).

    It seems to me that paying the mortgage off would be the best option, but my partner insists I should wait til my deal runs out. Am I missing something?

    thanks
    Originally posted by langtonhighway
    your want to port your mortgage to a new place you are buying for your daughter?


    Will you be living in the place as well?
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