Selling apartment, no new mortgage

If we have an apartment that we have paid interest only on for the first year and we now want
to sell it what would the final mortgage value be to clear?

Our mortgage payments are based on a principle plus interest over the life of the mortgage
right, so would it be just like a car loan where you would get a settlement figure if paying off early that would be lower than the statement would say is left?

Hope that makes sense

sinbadsailor said:

If we have an apartment that we have paid interest only on for the first year and we now want
to sell it what would the final mortgage value be to clear?

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Ask your lender what the capital sum outstanding is! If it's a fixed rate loan then you may face penalties for paying it off. Otherwise you just pay them the amount currently outstanding.

sinbadsailor said:

If we have an apartment that we have paid interest only on for the first year ...

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but...

sinbadsailor said:

Our mortgage payments are based on a principle plus interest over the life of the mortgage...

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I'm confused...??

If you have been paying interest only then I would imagine that the mortgage outstanding is exactly the same as it was when you took it out, ie. 100% of the capital still needs to be repaid.

ButtermilkJa said:

If you have been paying interest only then I would imagine that the mortgage outstanding is exactly the same as it was when you took it out, ie. 100% of the capital still needs to be repaid.

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I was going to say that but the original poster doesn't actually clarify how long they have owned the property. If it's a year or less and they were on interest only then obviously the owe the original amount borrowed.

Sorry yes, I just edited my post to take that into account. It needs clarification.

The property was remortgaged 12-13 months ago and new mortgage amount was 240k
We paid 12 months interest only and 2 months at full payment at this stage. We are on
a tracker mortgage around 4.9%. We have owned it for 5 years

So what you are saying is that the 12k or so in interest only payments for the first 12
months is gone to the bank and we still owe the 240k less whatever principal portion
from the 2 full payments we have made since movin off interest only?

But isnt the interest payable calculated over the life of the mortgage, so if you clear early
you are due some interest back since you have not hit the end of the term? i.e the interest
payable for the other 24 years does now not apply?

sinbadsailor said:

The property was remortgaged 12-13 months ago and new mortgage amount was 240k

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Can you please post a complete history of the mortgage on this property as this is also unclear - e.g. what was the mortgage before this period?

We paid 12 months interest only and 2 months at full payment at this stage. We are on
a tracker mortgage around 4.9%. We have owned it for 5 years

So what you are saying is that the 12k or so in interest only payments for the first 12
months is gone to the bank and we still owe the 240k less whatever principal portion
from the 2 full payments we have made since movin off interest only?

Click to expand...

That sounds about right.

But isnt the interest payable calculated over the life of the mortgage, so if you clear early
you are due some interest back since you have not hit the end of the term? i.e the interest
payable for the other 24 years does now not apply?

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No - the interest payable is calculated on the reducing balance of capital outstanding. Since this was static for a year you still owe the same capital amount.

Just ask your lender to a settlement figure.

I would imagine that approximately €400 of each of your two 'full payments' went towards the capital amount.

As stated, interest paid so far is non-recoverable in the case of early settlement. So I would estimate the final balance to be in the region of €239,200.00