Can you sell your house during a fixed rate mortgage?

Where can you find your early repayment charge?

Start with your paperwork.

1. Your mortgage offer and illustration (the ESIS). The FCA’s standard information sheet has a section headed “Early repayment”. Lenders must draw your attention to any early repayment charge and, where possible, show the amount. If the calculation is complex, they must explain how it is worked out and give the maximum, or an illustrative example.
2. The portability section. The same document has a section on flexible features, which must say whether you can transfer the mortgage to another property and on what conditions.
3. Your lender. MoneyHelper suggests asking your lender if you cannot find the details. Ask for the charge in pounds on a specific date, whether it steps down during the deal, and the exact date your fixed rate ends.
4. A redemption statement. When you are close to a sale, ask for a figure calculated to your expected completion date. Your solicitor will request the formal one.

Can you port your fixed rate to your new home?

Often. MoneyHelper says most mortgages are now portable, meaning they can be moved to a new property. But there are catches.

• It is a new application. You must meet the lender’s affordability checks and criteria again. MoneyHelper warns that if you do not pass, your only option might be another lender, which means paying your existing lender’s early repayment charge.
• Only the existing balance keeps the deal. If you need to borrow more, the extra amount may be on a separate deal with its own fees, which may not end at the same time.
• Timing matters. MoneyHelper says porting usually needs to happen at the same time as the sale to avoid early repayment charges, and that you have to port within a specific timeframe, usually around 6 months. If you plan to rent between homes, you could run out of time.

If you are not buying again, porting is not an option, and the question becomes when to repay.

How can you time a sale around the end of your fixed rate?

MoneyHelper says introductory deals normally last between two and five years, after which you will probably move to your lender’s standard variable rate. Early repayment charges are tied to leaving a deal before it ends, so once your deal has finished that charge should no longer apply. Confirm this with your lender, and check for any exit fee.

Some practical points:

• It is the completion date that counts, because that is when the mortgage is repaid. Exchange alone does not trigger the charge.
• You can negotiate the completion date. MoneyHelper says completion typically happens between 7 and 28 days after exchange. A later date is possible if the buyer agrees, but it has to suit them too. MoneyHelper points out that in a chain, the date must be agreed with everyone in it.
• Compare the charge with the cost of waiting. Waiting a few months to avoid an ERC can make sense, but not if it risks losing a buyer, falling behind on payments or paying to keep an empty home.
• Think before remortgaging. If you expect to move soon, MoneyHelper suggests thinking carefully before locking into a new deal with large early repayment charges, and considering deals with low or no charges. Your current lender may offer a new deal, called a product transfer, and MoneyHelper says you can speak to your lender about one up to six months before a fixed rate ends.

Our guide to buying before selling looks at the timing questions when you are moving to another home.

What if the sale price will not cover the mortgage and the charge?

Add it up before you accept any offer: the outstanding balance, the early repayment charge, any exit fee, your legal costs and any agent’s fee. If the total is more than the price, you have a shortfall.

That is negative equity, or close to it. MoneyHelper explains that unless you have savings to cover the difference, you will need to find a way to pay the shortfall to your lender, and that if the shortfall could leave you in debt you should get free debt advice straight away. MoneyHelper, Citizens Advice, StepChange and National Debtline all offer free, confidential help. If you are behind with payments, speak to your lender as soon as you can; our guide to selling because of financial difficulty covers the options.

Does a quick sale change the picture?

It can, in both directions. A cash buyer can often complete quickly, which may bring completion forward into the period when your early repayment charge applies. The Office of Fair Trading found in 2013 that three to four weeks was typical for quick house sales. Equally, a buyer with no chain may be more flexible about agreeing a later completion date.

The bigger factor is usually the price. A quick sale to a cash buyer usually means accepting less than full market value in return for speed and certainty, and on top of an early repayment charge that can make a noticeable difference to what you keep. Our guide to how much cash buyers pay explains how to judge an offer.

If you know your redemption figure and want to compare options, you can get offers for my home from vetted cash buyers on our panel, and ask each one whether they could work to a completion date that suits your mortgage. It is free, and there is no obligation to accept.