Early repayment charges

[BG2015]

I've got a 7 year fixed rate that has 3 years left to go so if my sale goes through today (in middle of negotiations) then I'll have to pay early redemption fees.

I'm selling because of ill health and want to be mortgage free.

If the sale goes through before 1st May 2024, I'll pay 5% of my outstanding balance which by April would be £2,860.

If I wait until the 2nd May it drops to 3% and it would then be £1,700.

Can I stall this? I know I can ask my solicitor but just wondered if anyone knows.

When does all the money move around? I know the average house purchase and sale can take 12 weeks, which from today takes us to mid May. When will they ask for a figure from my mortgage provider?

Money is very tight so an extra £1.1k makes a big difference to me.

Thanks

It will depend on the chain too to a certain extent, if you’re selling to a first time buyer and moving to somewhere that is also chain free it may be as little as 10 weeks, but equally if there’s a chain I would say currently around 12 weeks.

Equally you can dictate your date to a certain extent as it’s not as if it’s months away? Just be clear with the agent / solicitor that the earliest date you can move is xx/xx/xx.

Thanks for your reply.

If I get the house I want, the chain would only be 3 people long as my buyer has sold and the person I want to buy from is also chain free.

An ideal situation but not if you want to drag it out a bit.

For that small difference I wouldn't risk losing your sale by stalling.

Wouldn’t you end up paying several more months mortgage repayments of which a percentage would be interest anyway? So if you offset the interest against your figures it would be less of a benefit than you think.

I wouldn’t risk it either.

No you're right I wouldn't risk it but if it worked in my favour time wise I'd be happy.

You may well find that you are better porting the mortgage and putting the cash in high interest accounts and using this to pay off the mortgage each month.

We are doing this- have 1.52% and would be mortgage free but keeping the mortgage

If your rate is quite low (which I assume it is from 4 years ago) I wpuld port the mortgage (assuming that you are buying something else) and then put the cash in a tax free isa (can get cash isa for 5% or stocks and shares.. can do up to 20k before april and another 20k in the next financial year) and then the rest in fixed term savings to end in about 3 years... then just end the mortgage in 3 years time. This way you save the early repayment charge, and make some money. Would obviously keep the amounts your need to pay mortgage available, and if you want to can pay the 10% or whatever limit it is you can pay without having to pay charges.

But I understand that sometimes paying off the mortgage is something that is good for wellbeing. In that case I would see how things are progressing and try and make it as clear as possible that you are looking to complete in May.

This is good advice if your remaining 3 years is at a low rate which I suspect it might be.

Don't want to port my mortgage - might as well stay here.

My rate is 2.39% until May 2027.

My mortgage ends 2032. I'll have no equity left.

Selling for £260, mortgage balance roughly £58k, buying for £200k.

I've been over paying my mortgage so I'll be £10k a year better off with no mortgage.

I can then either reduce my days at work or retire.

Ahh ok, back to your original question then. Yes you would probably be able to delay but don't mention it now. Wait until everyone is fully committed. You probably won't even have to ask for a delay anyway. The solicitor asks for your redemption figure a few days before but it will be calculated for the completion date not the figure on the day they ask for it.

Duplicate post

Triplicate post, what's wrong with my Internet connection today...

But you will have the 58K in the bank earning interest at a higher rate than the mortgage will be at? So you will only pay the mortgage from that £58K?
So you will make money and no early redemption charge?

If nothing has been started yet and you're still negotiating on price I'd expect completion in May anyway. 3 months seems to be the average around people I know. We actually struggled to complete in 3 months last year when we desperately wanted to keep our rate.

I agree with @DrySherry its likely to take at least 3 months anyway & it should be possible for you to delay it slightly if it looks like it’s moving too fast without actually stating that is your intention. I wouldn’t say anything right now that could possibly upset anyone in the chain.