changing fixed rate term

stedwell

HI
Does anybody know if I can change my term on a fixed rate mortgage. I know there are penalties for overpayiong too much but I'm not sure about changing the term. Thanks (Although I probably know the answer is going to be no!)

beecher2

I think Halifax used to charge something like £10 to change the length of the mortgage, but other than that I don't think there will be a penalty. Phone your lender up and ask.

STAR_BUCK

tHATS A VERY GOOD QUESTION OP. Has anyone done that? I've just remortgaged and fixed for 5 yrs with Brittania on their 3.99% mortgage. At the same time I reduced the term of my mortgage. Might give them a ring adn see whetehr they allow mortgage terms to be reduced further during the duration of a fixed term? Will post on her once i'm off the blower

Mrs_Z

Check with your lender.

hels234

Check with lender. I'm with Scottish Widows on a fixed rate and they didn't charge me for reducing the term

stedwell

Thanks for your replies.
I was thinking along the lines of:

I am overpaying by the maximum amount of £500 but surely I would save interest by shortening the term so that my mortgage repayments reflected the same amount?

redpete

If you are overpaying then you will effectively shorten the term - you will have paid it all off before the end of the contract term.

TrickyDicky101

redpete wrote: »

If you are overpaying then you will effectively shorten the term - you will have paid it all off before the end of the contract term.

That's not necessarily the case - when I started overpaying on my Nationwide mortgage, they used the overpayment to reduce the standard monthly payment rather than reduce the term (because it obviously makes more money for them). I had to explicitly tell them that I wanted the overpayments to reduce the term, not the monthly payment.

dimbo61

I have also reduced the term after taking out a long term fix and as long as you dont clear the mortgage before the end of the fix MOST ! lenders will allow this.
Now some lenders charge a small admin fee to do the paperwork and some wont allow you to change the term so you need to ring your lender .
Check you can afford the higher payment each and every month? and also that you can extend the term back to the original end date if things get tight

Thrugelmir

TrickyDicky101 wrote: »

That's not necessarily the case - when I started overpaying on my Nationwide mortgage, they used the overpayment to reduce the standard monthly payment rather than reduce the term (because it obviously makes more money for them).

Not the case. Amending the contractual term of a mortgage would require explicit consent from the borrower. A lender cannot "assume". So anything the lender does is to minimise administrative costs.

TrickyDicky101

Ok fair enough It does also make them more money though.