Mortgage Question - Early Repayments/Changing Terms

McCreary

Hi there,

Looking for a bit of advice/clarification about mortgages...

I've managed to get a mortgage as a First Time Buyer and it is fixed for two years. The repayments are over 20 years and if I wish to overpay then I am charged extra.

My question is this... if I transfer my mortgage to a different provider after the 2 year fixed period can I change how much of it I pay off per month and decrease the term to something like 15 years? When you change your mortgage do you change the terms of the mortgage or is it simply the exact same agreement but with a different provider?

I'm really happy with the deal I got for my mortgage but I've been thinking that in a couple of years when I get a pay rise I will be able to pay off more a month and wondered if this would be possible if changing provider?

Thanks for any help you can provide - I am new to this!

beecher2

When your 2 yeras are up you can change the term to whatever you want it to be. In fact you should be able to do with your present lender too. Check your documents as you should be allowed to overpay some of your mortgage without being charged - typically 10% in any rolling year.

McCreary

Thats brilliant - thanks for the reply!

It's just I have a large amount of expenditure at the moment since I am spending my money renovating the house but when it's done and I get my pay increment I'll have a bit more spare cash each month. Would you advise me to increase my mortgage repayments or put it in a savings account?

neverdespairgirl

Consider some of both. I think it's always a good idea to have a rainy-day fund - for a new boiler / car engine blows up / [insert cash-devouring catastrophe of your own here], and a few quid in case of ill-health, redunduncy, etc.

Once you have your stash (in an ISA, for tax-free interest) then overpay all you can.