Paying off Mortgage early-how much does it cost?

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thebourke

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I have recently applied for an 85k mortgage over a 15 year period at an apr rate of 4%.Mortgage repayments will be approx 625euro per month...
My mortgage has been aproved.
However, in about 6/7 months time I could be getting a lump sump payment of 85k
from one of my relations...I would then use this 85k to pay of my mortage in full
The question i want to know is how much would the bank charge me for having a mortgage over that 6/7 month period?
 
There is no charge assuming you are on a variable rate mortgage. Just the interest on the loan over the period.
You will have all the usual costs in setting up a mortgage plus a mortgage protection policy, valuation fee etc
 
thebourke said:
The question i want to know is how much would the bank charge me for having a mortgage over that 6/7 month period?
Click to expand...

If it’s a variable rate mortgage you should be able to repay it at any time without penalty.

Put your figures into http://www.drcalculator.com/mortgage/ click on the Monthly Table tab and it shows the interest applied each month over the life of the mortgage.

Assuming the interest rate remains at 4%, after 6 months you would have been charged €1,682.65 in interest and would have an outstanding balance of €82,910.24

Who is giving you a mortgage at 4% ? Is that a discounted variable rate for a limited period ?
 
I wonder if you would be better off waiting until you had the cash to buy the house without a mortgage?

It would just be a much simpler process and you may well find it easier to buy if you are a cash buyer.

You won't need to take out mortgage protection - but you can cancel that anyway as soon as you have taken out the mortgage. Tell your insurance broker what you are doing up front as they may get you a cheaper quote for a short term policy. But they will charge you a fee for arranging it, as their commission will be taken back.

It won't save you much if anything in costs. Your solicitor might charge you marginally less as they won't have the hassle of dealing with a bank.
 
i can't wait the 6/7 months to for the money..i have gone sale agreed on the house already...

it turns out i will be getting 52k in a months time..so that would mean i woud need 33k from ulster bank now
i will htne get the balance in 6/7 months time from my relations..
which actually works out better financially..having a loan or a mortgage for the 6 months....
 
Doubt they will give you a mortgage of 33k, think their minimum is 50k. Loan interest rate will be higher than mortgage rate usually.
 
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