Changing Length of Term = Overpaying more

nig0609

Is it possible to change the length of a mortgage during its fixed term?

The idea would be to decrease the term from say 25 years to 15 years, this would increased the monthly payments and therefore one could effectively overpay a substantial amount without incurring any fees?

does this sound right or just a pipe dream?

beecher

It maybe depends on your lender, but mine allows you to change the length of the mortgage term by paying £10. As far as I know there's no limit on the length of time you can decrease it by.

nig0609

Thanks beecher, so am i right in assuming this would increase your monthly payments as well as you being able to make the typical 10% overpayments without penalty - except the £10 fee?

beecher

Yes, can't see why not. Any time I've made a capital repayment I've been asked if I want to change the term, so I think it is quite a common thing for people to do.

nig0609

Thanks for your input

Anon

I understand from chatting to CS at Nationwide that it is a legal/FSA requirement to allow you to change the term - in their case, no fee involved (or so they said) and you could reduce or increase as many times as you want - someone on another thread reported changing it 3 times in the past 5 months for this very reason (effectively increasing the overpayment without breaching the limit, then also able to pay up to another £500 per month).

Anon

dimbo61

my lender charged me £50 for changing my term
check with your lender or read the terms & conditions of your mortgage offer

uzubairu

Anon wrote: »

I understand from chatting to CS at Nationwide that it is a legal/FSA requirement to allow you to change the term - in their case, no fee involved (or so they said) and you could reduce or increase as many times as you want - someone on another thread reported changing it 3 times in the past 5 months for this very reason (effectively increasing the overpayment without breaching the limit, then also able to pay up to another £500 per month).

Anon

It's me.

We've gone from £646 to £891 after 3 requests in 5 months.
We've been told we can do it as often as we like free of charge (just request form, fill it out and send it back).
Still overpaying £500 per month by standing order.

When we did it the 2nd and 3rd time, we phoned Customers Services and told them how much we wanted to pay each month, and the assistant worked out the date we needed to put on the form to generate the required payment.

Hoping to have it paid off by the time the fixed rate ends in 2016 (MFW #157).