Dumb question. Breaking fixed term?

MrCrypt · 15 July 2017 at 7:37AM

Hello

I'm new to the forum and mortgages

I have a probably dumb question. If you were to take out a fixed mortgage for say 10 years, with a term that was short (e.g. 10-15 years instead of 25-30), are you 'locked into' that deal? I'm thinking along the lines in which say one of the people on the mortgage lost their job so things became tight - would you be allowed to break the fixed term and port onto a different mortgage with lower repayments (i.e. extend the term) or doesn't it work like that?

I see mortgages have exit fees but I think these relate to if you pay the mortgage off early?

Thanks

Westminster · 15 July 2017 at 8:07AM

The exit fees are still payable regardless of reasons.

MrCrypt · 15 July 2017 at 8:16AM

Westminster wrote: »

The exit fees are still payable regardless of reasons.

I'd have no problem/issue paying an exit fee

I'm asking if it's possible to break a fixed term (e.g. a 10 year fixed with a mortgage term of 10/15 years) sometime during the term if needed, say to port onto a mortgage with a longer term (e.g. variable rate with term extended to 20 years) to bring down repayments if one of us lost a job? Would it be as simple as saying we want to switch and pay the exit fee, or are we pretty much 'fixed into' the fixed deal for the 10 years?

Sorry, initial post may not be best worded.

debtisnotme · 15 July 2017 at 8:28AM

As well as an exit fee you would likely have early repayment fees of a % of your loan. The best thing to do is take the mortgage over a longer term and over pay it, this way you have the flexibility of lower payments without neededing to break the terms of your fixed rate.

glentoran99 · 15 July 2017 at 8:33AM

MrCrypt wrote: »

I'd have no problem/issue paying an exit fee

I'm asking if it's possible to break a fixed term (e.g. a 10 year fixed with a mortgage term of 10/15 years) sometime during the term if needed, say to port onto a mortgage with a longer term (e.g. variable rate with term extended to 20 years) to bring down repayments if one of us lost a job? Would it be as simple as saying we want to switch and pay the exit fee, or are we pretty much 'fixed into' the fixed deal for the 10 years?

Sorry, initial post may not be best worded.

If losing a job meant you were getting it tight. the chances of switching to a different deal would be close to zero

MrCrypt · 15 July 2017 at 8:41AM

glentoran99 wrote: »

If you lost your job the chances of switching to a different deal would be close to zero

I'm not sure that's true - I have two sources of income plus partners income, so if either lost main job we'd likely still have sufficient income for a more 'normal' term going off lenders calculators.

We're both under 30 with 50% deposit and was looking at clearing mortgage in 10 years (very doable) hence looking at a 10 year fix and asking the question

MrCrypt · 15 July 2017 at 8:42AM

glentoran99 wrote: »

If losing a job meant you were getting it tight. the chances of switching to a different deal would be close to zero

Ah I see you've changed post

nah, we should still be okay

Dandytf · 15 July 2017 at 8:59AM

MrCrypt wrote: »

Hello

I'm new to the forum and mortgages

I have a probably dumb question. If you were to take out a fixed mortgage for say 10 years, with a term that was short (e.g. 10-15 years instead of 25-30), are you 'locked into' that deal? I'm thinking along the lines in which say one of the people on the mortgage lost their job so things became tight - would you be allowed to break the fixed term and port onto a different mortgage with lower repayments (i.e. extend the term) or doesn't it work like that?

Thanks

Lost my job 1 overpayment saved my home found another job almost 3months later

Consider making overpayments reguarly as a safety net against unemployment

The overpayment amount isnt important regualar overpayments are a neccesity
small medium or large

buttonmoon · 15 July 2017 at 9:32AM

I took out a longer mortgage with a lower repayment but overpay each month so my mortgage will be paid off many years early fingers crossed. I know that if I lost my job that I could still manage to pay my mortgage. If you had shorter mortgage on a fixed term deal for 10 years (which I expect has a much higher interest rate than shorter fixes) and you lost your job you would need you get a new mortgage with a lower repayment (but how are you going to do that if you lost your job) and pay any exit fees to get out of your fixed rate deal.

AnotherJoe · 15 July 2017 at 9:46AM

MrCrypt wrote: »

I'm not sure that's true - I have two sources of income plus partners income, so if either lost main job we'd likely still have sufficient income for a more 'normal' term going off lenders calculators.
)

There really seems little point taking out a 10year fix in that case, take a longer term which will be ata lower rate, and overpay at an amount that approximates to a ten year term. Just make sure it's one that doesn't have limiting overpayment conditions.

MrCrypt · 15 July 2017 at 12:14PM

AnotherJoe wrote: »

There really seems little point taking out a 10year fix in that case, take a longer term which will be ata lower rate, and overpay at an amount that approximates to a ten year term. Just make sure it's one that doesn't have limiting overpayment conditions.

Thanks - I think this is what we're going to do in hindsight

Dumb question. Breaking fixed term?

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