Early settlement of mortgage

All,

I am in the enviable position of being able to pay off my mortgage early. I have about 8 years left and I reckon I will save tens of thousands of Euro in interest etc. Generally I am interested in anyone's experiences doing this.

I fixed into a 5 year fixed rate last year and so I am liable to be penalised for breaking the 5 year tie-in. I thought if you settled early this didn't come into effect. But the Bank says it does and will penalise me. So as a result the settlement amount is slightly higher than the outstanding amount. If I wasn't locked into this 5 year rate, would the settlement be significantly lower?

Are there any reasons why I shouldn't settle early? (I can't think of any)

Lenders cannot charge tracker/variable rate owner occupier mortgage holders anything for paying the mortgage off early. However where the rate is fixed they are within their rights (under the terms & conditions of the loan agreement) to charge penalties. You can try haggling with them but any reduction or waiving of the charges will be at their discretion. You need to factor in the breakage penalties when deciding whether you would be as well to clear the mortgage now or wait and use the money for some other purpose. Perhaps you can post detailed figures?