Breaking a fixed-interest mortgage contract

[hiflier]

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?

[bednobs]

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

[factor-fiction]

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.

[dasherman]

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!