6 yrs left but wanna extend to 20yrs for lower payments

andy000223

Hi everyone

We are paying nearly £300 a month and only have 6yrs left to pay,with money really tight at the moment we were thinking of extending our morgage so we could reduce the monthly payment.

We were thinking of extending it to 20yrs or so or until were 65, would this be possible? would the morgage company let us do this?

anyone done a similar thing to free abit of money for living expenses

Regards Andrew ..

pwllbwdr

You'd have to ask your lender if they would reschedule the term. But you would end up paying a huge amount more over the term. Having only 6 years to go is an position many would envy.

PasturesNew

At £300/month, just £10/day, your mortgage is less than many grotty bedsits in most areas around the country .... could you do an SOA and find other ways to make the savings you need?

If you fill this in http://www.makesenseofcards.com/soacalc.html and post it on the Debt Free Wannabe board, they can help you with reducing your outgoings, or see ways to increase your income.

It'd be mad to give up so close to the finishing line and saddle yourself with longer debt.

opinions4u

£18k over 6 years at 5% = £295 a month = £3,240 interest in total.

Over 20 years = £120 a month = £10,800 interest.

You will pay back three and a half times more interest doing this.

Ideally find other ways to cut back. The post above points you in the right direction.

andy000223

Thanks. great advice and i think we will tighten are belts and try and get through the next 5 years.

banks4u

However, if you extend the term you can make overpayments to your mortgage so in affect reducing your term if you require but not having the contractual payment each month.

nrsql

opinions4u wrote: »

£18k over 6 years at 5% = £295 a month = £3,240 interest in total.

Over 20 years = £120 a month = £10,800 interest.

You will pay back three and a half times more interest doing this.

Ideally find other ways to cut back. The post above points you in the right direction.

How much will £10,200 be worth in 20 years?

Can't remember how much my first flat cost but it seemed like a lot. By the time the mortgage completed I could have bought it out of petty cash almost. I'd have felt pretty stupid if I'd scrimped to pay it off early.
Usually the best plan is to wait for inflation to eat away at the amount as in the early years payments will probably be difficult whereas later easy. Only fails if your earning power drops.

getmore4less

That worked a lot better when there was inflation

I can remember getting multiple cost of living rises a year but the mortgagewas also 10%+ so you needed them.

Now we have low inflation and no pay rises it does not work quite as fast.

geoffky

wages rises ????? whats that? inflation yes but not wage inflation...here lies a big problem for people in debt..

drewwa

Can't remember how much my first flat cost but it seemed like a lot. By the time the mortgage completed I could have bought it out of petty cash almost. I'd have felt pretty stupid if I'd scrimped to pay it off early.
Usually the best plan is to wait for inflation to eat away at the amount as in the early years payments will probably be difficult whereas later easy. Only fails if your earning power drops.

Sorry, that's 60s and 70s advice. Inflation is currently tiny and payrises are few and far between. Best advice for the OP is to tighten belt and clear mortgage, not extend term.

Cheers,

Drew.