Clear Mortgage?

Qprmeath

Does anyone know how a bank calculates how much it costs to clear a mortgage? Is it likely to be less or more than the money currently owed?

canonball5

Qprmeath wrote: »

Does anyone know how a bank calculates how much it costs to clear a mortgage? Is it likely to be less or more than the money currently owed?

For the most part it should be less as you're not paying the interest that you would have if you kept it for the full term.

You will need to check if there is a penalty for early payment and if they will accept whatever the amount is.

Qprmeath

canonball5 wrote: »

For the most part it should be less as you're not paying the interest that you would have if you kept it for the full term.

You will need to check if there is a penalty for early payment and if they will accept whatever the amount is.

I’ve asked for a figure. Don’t think there is a penalty for early payment. Was told there is a €60 administration fee.

canonball5

Qprmeath wrote: »

I’ve asked for a figure. Don’t think there is a penalty for early payment. Was told there is a €60 administration fee.

That's great news, congrats!

cruizer101

My understanding is once you are on variable you can overpay as much as want. If that is the balance of the mortgage so be it, can't see why there would even be administration fee.
The exact amount might be hard to calculate depending on when the interest is calculated and that but just make payment of balance minus 50 quid, then that will be paid off by final payment.

Fixed is different ball game, will likely have to get figure from bank, and I'd be surprised if no penalty. Penalties are less that what they used to be mind.
It should be in the terms of mortgage somewhere as will vary by bank and when mortgage taken.

DubCount

AFAIK the bank issue a settlement figure being the capital amount outstanding at the date of the last payment, accrued interest between the date of settlement and the date of the last payment, and any admin fee. I think the admin fee is to cover the cancellation of the legal charge over the property and returning the deeds to you.

Congratulations - a great milestone to achieve.

Qprmeath

An update, the figure I’ve been given is -
Balance +
Security release fee €60 +
Accrued interest
Breakage cost is quoted as €0

Security release fee is for legal expenses

happyfriday74

Nice position to be in before Christmas OP.

Delighted for you. Well done

canonball5

Qprmeath wrote: »

An update, the figure I’ve been given is -
Balance +
Security release fee €60 +
Accrued interest
Breakage cost is quoted as €0

Security release fee is for legal expenses

That's great news, well done!