Redeeming your mortgage

You may want to pay off your Buy to Let mortgage early, perhaps because you are looking to sell a particular property or are considering remortgaging to another lender to get a better deal. Alternatively you may have a lump sum available and want to pay off your mortgage to reduce your monthly outgoings.

In this section you will find information to make the process of redeeming your mortgage as smooth as possible.

What do I need to do to pay off my mortgage?

If you are wanting to pay off your mortgage early, you need to contact us to request a redemption statement. This statement will tell you how much you currently owe on your mortgage as well as showing you any fees payable. If the sale price of your property is insufficient to cover the amount you owe on your mortgage, then you are responsible for covering this 'sales shortfall' from other funds.

As such, if you have a repayment vehicle such as an endowment or investment you will also need to get a current valuation for this, to ensure that it's expected value is enough to cover the amount you owe on your mortgage.

What fees might I have to pay?

When you pay off your mortgage you may have to pay a redemption fee, which covers the maintenance and general administration of your mortgage during it's term. This fee is non- refundable and is added to the final amount that you owe us.

You may have an Early Repayment Charge (ERC) on your mortgage. This is usually a percentage of the amount being repaid and will be added to the final amount that you owe us.

"Great news! We are currently waiving all Early Repayment Charges until further notice." Find out how you can benefit from this

You can find details of any fees payable on your original mortgage offer. If you no longer have this document, you can contact us to find out more.

What if my property is worth less than the mortgage?

If you are in negative equity, you will still be legally responsible for the full amount of the mortgage that is outstanding. You should contact us before you proceed with any sale if this is the case, so that we can discuss options with you and let you know how we will manage a sales shortfall in this instance.

Improve the likelihood of paying off your mortgage in the future

With property prices falling or remaining depressed, you could find that your property is worth less in the future than you might expect. However you can make it easier to pay off your mortgage in the future by taking action now.

If you currently have an interest-only Buy to Let mortgage, you may want to switch to a Repayment mortgage now. This will allow you to start paying off the capital each month and reduce the amount that you will owe when your mortgage term ends.

If you have a interest-only mortgage, you should also ensure that you have a suitable investment vehicle in place and should check that this is on track to generate sufficient funds so you can repay your mortgage in full at the end of your term. You may need to consider increasing your payments if there is likely to be a shortfall.

Finally, you could also start making overpayments on your mortgage to reduce the amount that you will owe when your term ends.

To discuss any of these options, please call us.

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