Trying to calculate mortgage redemption figure

Trying to calculate mortgage redemption figure

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P-Jay

Original Poster:

11,042 posts

206 months

Monday 19th May
quotequote all
Why is this so difficult to get?

Mortgage is due for renewal in Sept. Broker pushed me to lock in a deal 6 months prior to hedge our bets and that made sense. They asked what will be outstanding so I made a approximate guess (which they said is fine). 2 months later and I'm signing this and I'm signing that, (told I can still switch to a better deal up to 2 weeks before) but I don't like guesses and vague information.

Today I get a redemption statement through, and I'd need to pay them £8k to complete, which I can't. They say not to worry, this "may" include early redemptions fees, but they don't seem sure.

Spoke to the mortgage provider "assuming I don't miss any payments" (which I won't) what will be our redemption figure in Sept "Sorry, we don't do that".

Spoke to the broker, "When we signed up to this fixed rate deal 2 years ago, what was the redemption figure due to be?" "Sorry, I don't know".

I know how much we borrowed back then, how much we pay and the rate, is there a calculator I can use to get a better idea, because I don't want to have to do all this against the clock whilst I'm on hols to complete 3 days later.

scot_aln

586 posts

214 months

Monday 19th May
quotequote all
Why is the broker pushing for signing up early, commission [how cynical of me]. Never know for sure but I thought the expectation was of slowly reducing rates?

https://www.investec.com/en_gb/focus/economy/mpc-i...

zsdom

1,498 posts

135 months

Monday 19th May
quotequote all
If you’re staying with the same lender go direct to them to choose your rates, you can choose a new rate up to 6months before the expiry of your current deals end & select it to start on the expiry date without paying any charges, the only time a charge should be involved is if you want to start your new deal early & you’ll be paying an early repayment charge

Gville

38 posts

61 months

Monday 19th May
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This is absurd. You are not asking for anything unreasonable here, are within your rights to receive it and if you don’t like what you have signed you can get out of it. This is a regulated area and you are protected. Don’t stand for any st.

Sarnie

8,221 posts

224 months

Monday 19th May
quotequote all
P-Jay said:
Why is this so difficult to get?

Mortgage is due for renewal in Sept. Broker pushed me to lock in a deal 6 months prior to hedge our bets and that made sense. They asked what will be outstanding so I made a approximate guess (which they said is fine). 2 months later and I'm signing this and I'm signing that, (told I can still switch to a better deal up to 2 weeks before) but I don't like guesses and vague information.

Today I get a redemption statement through, and I'd need to pay them £8k to complete, which I can't. They say not to worry, this "may" include early redemptions fees, but they don't seem sure.

Spoke to the mortgage provider "assuming I don't miss any payments" (which I won't) what will be our redemption figure in Sept "Sorry, we don't do that".

Spoke to the broker, "When we signed up to this fixed rate deal 2 years ago, what was the redemption figure due to be?" "Sorry, I don't know".

I know how much we borrowed back then, how much we pay and the rate, is there a calculator I can use to get a better idea, because I don't want to have to do all this against the clock whilst I'm on hols to complete 3 days later.
Your Redemption statement will be including your current ERC, as it will be based on you redeeming the mortgage within the next month.

The illustration you would have been given two years ago will include a balance schedule on the last page which will take you what your balance should be each month and year for the whole term of your mortgage.

Just adjust the loan amount to whatever the balance is currently then, as you'll make payments between now and your completion date, the redemption amount will only be lower than the amount you have applied for. You'll then receive the surplus funds on the day of completion which you can then overpay straight back off your mortgage. No excess for you to pay then and no stress when you are away.

bennno

13,755 posts

284 months

Tuesday 20th May
quotequote all
P-Jay said:
Why is this so difficult to get?

Mortgage is due for renewal in Sept. Broker pushed me to lock in a deal 6 months prior to hedge our bets and that made sense. They asked what will be outstanding so I made a approximate guess (which they said is fine). 2 months later and I'm signing this and I'm signing that, (told I can still switch to a better deal up to 2 weeks before) but I don't like guesses and vague information.

Today I get a redemption statement through, and I'd need to pay them £8k to complete, which I can't. They say not to worry, this "may" include early redemptions fees, but they don't seem sure.

Spoke to the mortgage provider "assuming I don't miss any payments" (which I won't) what will be our redemption figure in Sept "Sorry, we don't do that".

Spoke to the broker, "When we signed up to this fixed rate deal 2 years ago, what was the redemption figure due to be?" "Sorry, I don't know".

I know how much we borrowed back then, how much we pay and the rate, is there a calculator I can use to get a better idea, because I don't want to have to do all this against the clock whilst I'm on hols to complete 3 days later.
Speak to your mortgage provider and ask them for the date that your early redemption penalty ends, ask them what penalty is applied if you move before that.

Personally i suspect mortgage rates will only go down over the next 6-9 months - id not be locking in to anything, especially if id be hit with an early redemption penalty.

Sarnie

8,221 posts

224 months

Tuesday 20th May
quotequote all
bennno said:
Speak to your mortgage provider and ask them for the date that your early redemption penalty ends, ask them what penalty is applied if you move before that.

Personally i suspect mortgage rates will only go down over the next 6-9 months - id not be locking in to anything, especially if id be hit with an early redemption penalty.
Halifax put some of their rates up today, go figure.

Securing a rate protects you against if the market goes against you. There are no guarantees around what rates will do, they are only forecasts, anything can happen. Securing a rate, doesn't mean you are committed to it it just gives a "worst case scenario" rate. It also doesn't mean coming out of your rate early and paying an ERC. If rates reduce then you can easily transfer to the new lower rate, something we do for all our clients on a weekly basis all the way up to a few weeks out from completion.

Securing a rate early is good advice, sometimes the forecasts are not right.

skyebear

890 posts

21 months

Tuesday 20th May
quotequote all
Your new deal should start when your existing one ends so no ERC would apply. Unless your broker has made an arse of it.

And why wouldn't you look to market again if the terms your broker has got you allow for this?

bennno

13,755 posts

284 months

Tuesday 20th May
quotequote all
Sarnie said:
Halifax put some of their rates up today, go figure.

Securing a rate protects you against if the market goes against you. There are no guarantees around what rates will do, they are only forecasts, anything can happen. Securing a rate, doesn't mean you are committed to it it just gives a "worst case scenario" rate. It also doesn't mean coming out of your rate early and paying an ERC. If rates reduce then you can easily transfer to the new lower rate, something we do for all our clients on a weekly basis all the way up to a few weeks out from completion.

Securing a rate early is good advice, sometimes the forecasts are not right.
I guess it depends on the lenders offers, I suspect we will sew at least 2 more 0.25% cuts in the next 9 months - you'd hope that'll translate to cheaper mortgage deals.

Sheepshanks

37,014 posts

134 months

Tuesday 20th May
quotequote all
bennno said:
I guess it depends on the lenders offers, I suspect we will sew at least 2 more 0.25% cuts in the next 9 months - you'd hope that'll translate to cheaper mortgage deals.
I don’t know - inflation is looking pretty sticky and it could be tricky in terms of exchange rates if we get too far adrift from the US where there’s a lot of stuff going on.