Remortgaging early, or even selling early, is something you'd normally consider if, for example, there's a preferential mortgage rate to change to, you want to move house or because the relationship with your joint owner has broken down and you need to sell your property. The issue though is how soon you can remortgage or sell when tied into the mortgage and the penalties that arise with the Early Repayment Charge.
As you'll have seen from our
Early Repayment Charge article, mortgage lenders often charge huge penalties if you repay your mortgage before the early mortgage redemption charge period expires - in essence you are locked into your mortgage, however here are 2 ways to avoid paying the early repayment charge (plus our top tip on when best to remortgage):
1Stay with the same mortgage lender
This is the most common way of not paying the early repayment charge when remortgaging or buying another property. It does however limit you to the mortgage product options the mortgage lender offers which may not be as preferential as you can get on the open market.
If you're looking to sell and buy another property then this process is often called 'porting your mortgage', but in reality your existing mortgage is paid off in full on completion of the sale and the new mortgage is
registered over the new property. Be careful though; some mortgage lenders won't allow you to do this, for example:
These are examples and mortgage lenders have different terms depending on the specific mortgage product.
Halifax Bank Plc Taking your product rate to a new mortgage - In the future, you can apply for a new loan on another property. If Halifax agrees to the new loan you can take the following product(s) and any early repayment charge with you for the remainder of the product rate period(s). New loan applications are assessed in line with the lending policy at that time which may, for example, affect the repayment method, loan amount or term. The new loan will be subject to the terms and conditions in force when you make your application.
Metro Bank Plc If you move house you may be able to transfer the amount outstanding on your mortgage to another property provided you still meet our lending criteria at the time of application for the new mortgage. Fees may be charged when you transfer your mortgage. If you transfer your mortgage within the period when Early Repayment Charges are applied, you may not have to pay the Early Repayment Charges if the purchase of the new property completes within 30 days of the discharge of this mortgage and the new mortgage is for an amount equal to or more than this mortgage.
Virgin Money lf we are willing to accept a mortgage application from you in the future, we will allow you to transfer the remainder of this mortgage product to your next property. lf we allow you to transfer this mortgage product the following conditions will apply:
- You must be selling this property and purchasing another property to let out and complete the new
loan within three months of repaying this loan.
- If you do not repay the loan on this property on the same day that you complete the loan on your
next property then any applicable Early Repayment Charge set out above will be payable on that
day. If you then complete the loan on your next property within three months of that day, any Early
Repayment Charge paid will be refunded in full.
- If the value of your next property is less than this property, you may not be able to transfer all of the
outstanding loan balance to your new property.
- Additional borrowing will not be available on this mortgage product.
National Westminster Bank Plc You have the possibility, during the period in which an early repayment charge is payable, to port your existing mortgage product(s) to your new property subject to terms.
Nationwide Building Society If you move house, and we are able to offer you a new loan, you can keep this mortgage product and you will not have to pay an early repayment charge if you transfer the balance and the terms of this product to the new loan for the remainder of the Benefit Period.
You can find out your mortgage lender's position on porting your mortgage to a new property in the What happens if you move house? section of your mortgage offer or you can speak to your mortgage lender and ask them.
Do you need help to remortgage early?
We have a specialist remortgage department with mortgage brokers and specialist remortgage conveyancing solicitors. For further help call us on 0207 112 5388 or you can book an appointment with our broker or get a quote for our remortgage conveyancing.
* Access to whole of the market – Available Outside of Work Hours – No need for face-to-face meeting - Terms Apply
