Long term mortgage with intention to pay off early

Regallion

Hi all, I hope someone can offer me some general advice.

We're looking to move and require approx £100,000 to facilitate it. We have a current property with no mortgage although we'll obviously be selling it.

We really want a short term mortgage that we can pay off within the next year or two (wife has an inherited property that will be put up for sale at some point - just not in the time frames we want to work to).

I had a chat with HSBC who basically told me that 5 years is the bare minimum that they'd consider lending for - which is fair enough, I can understand it's not worth their while otherwise. I'd imagine this is the same for most lenders.

Can anyone offer some ideas on how we can effectively get a remortgage most effectively for this short term? I want to avoid a bridging loan as they are expensive and we no real idea of when we'll finally have the cash from the sale of the other house.

Ideally, we'd like to get another 20 year (to keep monthly payments down), repayment, variable off base rate (i.e no fixed term plans) that we can then just pay off as soon as we can without penalty.

Is the way to do this just not declare our intentions to lenders? We're 44 and 47 respectively so I'm also wondering if a lender would even consider a long term loan (despite our intention to pay early as we can).

Thanks in advance

_Andy_

They probably wouldn't go above retirement age.
Nothing states you have to tell them you're intending to pay it off early

kingstreet

An 18 year mortgage ('til the oldest reaches 65) with a product with no early repayment penalties?

Regallion

Yes that sounds about right!

Mrs_Z

You should be able to go for a tracker mortgage (with no early repayment penalties) and just pay it off early. HSBC offers one - just do not declare your intention to pay it off early when taking out the loan.

Regallion

Ok thanks for the advice.

I did make the mistake of explaining to HSBC our ultimate plans but luckily they didn't take any of my details so I can try them again!

I have an appointment with Nationwide next week as we still have a mortgage account with them with a nominal £1 balance so will see if there's any advantage with staying with them as a result.

Cheers all

WestonDave

If First Direct will take you for an offset mortgage, you will only have to pay the interest, and even if you go on a product with a redemption penalty (e.g. a promotional rate) you can still put the balance from the sale into a linked offset savings account so the net balance is zero and pay no interest from that point onwards. They will set it up as being paid off when the elder of the two reaches 65 but as its interest only that won't impact your repayments. (They will obviously take more than interest only and will calculate payments on a repayment basis if you want them to but its the interest that you have to pay each month).

Regallion

I had to read that a couple of times but I think I get what you're saying!

Interesting - thanks for that idea.