The penaties payable are based on the balance of your mortgage outstanding at the time of redemption.

It would appear that you started with a mortgage of £111,500 (give or take) and if you were to redeem your mortgage at this point you would have had to pay a 5% penalty which would equate to £5,575.

Your lenders offers a discount on the penalty for every completed year that you remain wioth them under the contract and that discount reduces the penalty by 1% until in the final year of your 5 year fixed rate you would face a penalty of only 1% of the outstanding balance of the mortgage at the time.

The penalty that you pay is pro-rata on the balance of your mortgage at the time of redemption so if your balance was down to £100,000 in the first year then the maximum penalty you could face would be 5% of £100,000 = £5,000

If it was year 4 and 3 months and your mrtgage balance was £100,000 the you would only pay 1% penalty for redeeming the mortgage £100,000 x 1% = £1,000.

So to cut a long story and answer your question. You may be facing a penalty of £3344 right now but if you wait till 30/06/2012 then your penalty for redeeming would reduce from 3% to 2% of the outstanding balance of the mortgage and assuming you have made no overpayments or have no arrears then the maximum penalty for redemption would be 2% of the outstanding balance which should work out to £2229.

Your jpg is a little slanted and I'm a little wobbly.

I think that you have signed up to a fixed term deal. If you make it through to the end of the fixed term deal then you can pick and choose where to go next and there's £0 repayment charge. If you don't want to make it through to the end of the fixed term deal, then you will be breaking the agreement and there's a penalty to pay. The penalty will be as you agreed when you signed the forms.

If you particularly want to communicate with the bank, then you should use recorded delivery for anything that is very important. "Proof of posting" is free and available from any post office. If you don't use either of these options, then the bank is quite likely to pretend that they didn't receive your letter/call. Phone conversations are only useful for the very basic bits of information.

Good evening,

i have been looking through my mortgage today and the repayment charges and i am a little confused to this..

http://imageshack.us/f/155/photo1xbn.jpg/

Can anyone advise me about the repayment charge as you can see if i break out of the mortgage now it will cost me £3344.97 but if i break out after 30/06/2012 does that mean i will pay the lower repayment charge of 2% of the loan amount?

Or am i totally missing something? it just seems strange a large drop once a year, does it not go down daily the repayment charge to make it more fair?

I did try ringing the bank but i was on hold for 10 mins to then be told that the office had closed :(

Thankyou