Moving mortgage lenders - early repayment charge

[user1465146157]

We are in the process of moving from one lender to another.

Our old lender has an early repayment charge in place, so a completion date can't be set until that is over.

Our usual mortgage payment is due to go out the very next day after the ERC expires.

No one seems to be able to tell me if there will be an overlap here - and if our mortgage will go out from both our old lender and our new lender?

Has anyone done this before that can tell me how it worked?

Will we be charged a higher interest with our old lender until the completion date is agreed and if so at what point will be get the remainder of the money back?

Many thanks

If your DD is due the day after your fixed product ends it will go as standard variable rate as you aren't fixing to go to a new product with that same lender. You can cancel the DD on your end but the bank will say only to do this if you're certain you will be completing shortly. Any problems that cause a delay on completing on your new property and you will need to make a manual payment for your old mortgage or you could fall in to arrears.

If you do pay the DD you should get a refund for part of the amount, depending on if your interest is calculated daily or not. So if your DD goes out on the 1st you pay from the first of that month to the last day of that month. If you then completed on say the 7th of the month, then you will get a partial refund of your DD payment as you would just need to pay from the 1st to the 7th of that month. It can take a little while for the refund to come through if your bank is anything like the place I work.

Maybe give the old lender a call and ask them what their process is, another option might be to move the DD date to further on in the month and hope you complete before that date, as your redemption amount will include the interest payment up to the day you redeem. You need at least 3 working days before your DD goes out to amend the date usually.

Hope this helps and I apologise if my paragraphs disappear as my App likes to remove them!!

@grool thank you so much for your reply - all makes sense, will call the lender about the DD! x