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Is ERC charged every time overpayment is made? SuzieGirl

Posted: Thu Mar 09, 2017 10:30 pm
by minealot159
Hi all



I have worked out that paying a large lump sum off my mortgage now will be worth paying the ERC rather than keeping it in the bank.



What I want to know is, if I decided to pay another overpayment or even remortgage elsewhere during my current mortgage deal will I pay the ERC again?



Thanks for your advice

Posted: Fri Mar 10, 2017 4:34 am
by herobrinehunter7
If an early repayment charge is applicable then it will be a percentage of the amount you pay off, so for example if the early repayment charge is 3% and you paid off £10,000, your erc would be £300, and then if you made the same payment in 6 months then again it will be another £300.



Out of curiosity would you mind posting your figures? i.e balance, interest rate, erc, and the amount your paying off?

Posted: Fri Mar 10, 2017 5:56 pm
by aliaalias
Maybe worth timing the over payments to avoid paying the ERC.

Posted: Fri Mar 10, 2017 11:18 pm
by minealot159



If an early repayment charge is applicable then it will be a percentage of the amount you pay off, so for example if the early repayment charge is 3% and you paid off £10,000, your erc would be £300, and then if you made the same payment in 6 months then again it will be another £300.



Out of curiosity would you mind posting your figures? i.e balance, interest rate, erc, and the amount your paying off?
Originally posted by glosoli


Mortgage £98,000

Interest 3.39% with just over 2 years to go on my 5 yr deal

17 years left on my mortgage term

Currently paying £635 ish per month

ERC is 3% now and 2% after 31st March

I have £40000 lump sum



I thought I would pay the maximum allowed this year now which is £9800 and the rest after 31st March.



The reason for the lump sum is from my pension as I took early retirement because of ill health. I need to reduce my monthly outgoings and also not have too much in savings as I may need to claim benefits. My annual income is being reduced by around £4000 per year.

Posted: Sat Mar 11, 2017 8:19 am
by charlena
£40k will last you over 10years of reduced income..



if planning to claim means tested benefits consider the deprivation rules.

Posted: Sat Mar 11, 2017 7:30 pm
by Lone_Sage360
You are not claiming benefits yet so if you want to pay 10% off your mortgage before the end of march that is your business