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Original poster

When are early repayment charges paid?

6 replies

Lunapuf5 · 03/03/2023 20:23

We are just at the start of the process of buying/selling having just instructed our solicitors. Today we received the redemption statement and I'm quite confused and embarrassed to ask our solicitor but is the early redemption fee paid now or when we move out/exchange? We still will obviously live here until we exchange so another 3-4 months and will still pay our mortgage?

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Fisherstevens · 03/03/2023 20:30

It's paid on completion - the payment and closure of your current mortgage is handled by your solicitor/mortgage company.

If you are buying at the same time as selling you may be able to port your existing mortgage and avoid paying the charge.

CatOnTheChair · 03/03/2023 20:35

When you redeem the mortgage.
The mortgage company will just send less money over - you don't actually pay it, you just never receive it, if that makes sense.

Original poster
Lunapuf5 · 03/03/2023 22:48

I'm very unsure it says something about paying in a cheque or bank transfer? Suggesting that we'd pay now and that we should pay this month otherwise interest applies when we don't plan on moving now. We plan to move out around June/July.

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GatherlyGal · 04/03/2023 11:55

Don't be embarrassed to ask your solicitors. You are paying them to advise you on the sale and purchase.

Much better to speak to the people actually dealing with it and know the details. Also it will by no means be the silliest question they have been asked!

Halfcenturytoday · 04/03/2023 12:04

The redemption statement mentions paying now and about interest owing changing as it is only valid for a limited time. When you know your completion date your solicitor will request an updated redemption statement. As other posters have said it will all be settled by your solicitor on completion.

Is it a large amount? Can you port your mortgage to your new property?

Original poster
Lunapuf5 · 14/03/2023 17:51

Halfcenturytoday · 04/03/2023 12:04

The redemption statement mentions paying now and about interest owing changing as it is only valid for a limited time. When you know your completion date your solicitor will request an updated redemption statement. As other posters have said it will all be settled by your solicitor on completion.

Is it a large amount? Can you port your mortgage to your new property?

It's currently £1300 as of now in March, we will probably complete around June time, by that time will it reduce? The deal was supposed to end at the end of October this year. And sorry to sound silly but how will it be settled by the solicitor? Would it be out of our sale proceeds? He said he will calculate this once we exchange contracts and if allowed by the lender they ll deduct ERC from the redemption figure but I'm not sure what that means

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