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  • FIRST POST
    • langtonhighway
    • By langtonhighway 14th Jun 19, 7:37 PM
    • 25Posts
    • 10Thanks
    langtonhighway
    redemption penalty or pay it off?
    • #1
    • 14th Jun 19, 7:37 PM
    redemption penalty or pay it off? 14th Jun 19 at 7:37 PM
    re-posted here as may have been in the wrong folder

    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
    • Mike48632
    • By Mike48632 14th Jun 19, 9:12 PM
    • 11 Posts
    • 2 Thanks
    Mike48632
    • #2
    • 14th Jun 19, 9:12 PM
    • #2
    • 14th Jun 19, 9:12 PM
    I think it depends on how much of the 10,500 you'll have to pay over 15 month is interest and how much is capital. If the interest part is more than 3,600 then you're better of repaying the mortgage and paying the penalty. If the interest is less, keep the mortgage and pay it off at the end of the deal.
    • AnotherJoe
    • By AnotherJoe 14th Jun 19, 9:50 PM
    • 15,969 Posts
    • 19,173 Thanks
    AnotherJoe
    • #3
    • 14th Jun 19, 9:50 PM
    • #3
    • 14th Jun 19, 9:50 PM
    As Mike says it's a simple calculation, will you pay more than 3600 interest in the next 18 months
    Post the numbers here (mortgage size and rate) and people can say.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • dimbo61
    • By dimbo61 15th Jun 19, 9:18 AM
    • 10,369 Posts
    • 5,614 Thanks
    dimbo61
    • #4
    • 15th Jun 19, 9:18 AM
    • #4
    • 15th Jun 19, 9:18 AM
    So you only owe 10,500 left to pay on the mortgage but the ERC is 3,600 WOW that's over 30% ERC
    So are you figures right ?
    I would port the mortgage to the new place and not pay the lender a penny extra.
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