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Breaking a fixed-interest mortgage contract

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hiflier | 15:10 Sat 06th Nov 2010 | Personal Finance
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I have a fixed-interest mortgage. I was told by an employee of the mortgage loan provider that if I paid off more than 20% of the loan it would break the terms of the contract and it would therefore revert to a standard variable interest loan. Would I also be breaking the terms of the contract if I went into arrears?
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you will have to read the contract to find out, As none of us has the benefit of seeing your terms and conditions, i'm afraid no-one can say. If you don't have the t and c to hand, just give them a ring to ask
i agree with bednobs. It is common for significant early repayments of more than 10% pa to result in some form of penalty. I don't know what the terms are regarding going into arrears but I think there's a pretty good chance they could penalise you.
If you go into arrears the worst case scenario is that your house will be repossessed so I would say there is a fair chance you are breaking the terms of the contract!

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