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Early Repayments Charges on Mortgage

Looking to remortgage and add a bit on for home improvements.

The best no strings attached deal is 4.69% and adds an extra 100pm interest for the home improvements.

However, going to a 2-year discount with a 3-year tie-in with early repayment charges may work out better?

If I go for a 2-year 2.2% fixed deal, I save 200pm even with the home improvements loan added. I just save away some or all of that 200pm for 24 months and use it to pay the early repayment charges.

According to the lender's website, if I get out right at the end of the

2-year discount the penalty is "a % of the amount repaid and will be: 6% between 01.08.07 and 31.07.08". I assume that means 6% of the previous 24 monthly payments which is 0.06*24*248 = 354 which sounds too low for an early repayment charge considering I can save 200pm on the deal?

Have I miscalculated somewhere?

Thanks for any comments,

Roland.

Reply to
Roland Watson
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Yes. By "amount repaid" they mean the amount that you need to repay to pay off the mortgage, not the amount you have already paid.

Reply to
Andy Pandy

Okay, that's an 8000 repayment penalty. So, I add that to the loan at 2.2%, put it in a savings acount earning 5% and give them their 8000 back at the end and pocket the difference in interest?

Reply to
Roland Watson

Duh, I just realised the 8000 stays on the mortgage!

Oh well.

Reply to
Roland Watson

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