Trying to extend the term of our mortgage

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If you cannot afford to repay at 1.5% then you are going to be even worse off on any other mortgage as that rate will be far worse.

You could perhaps consider a move or partial move to interest only though you may need to convince the lender you have a repayment vehicle in place, say the 25% from your pension ?

Whether you pay it using the vehicle is another thing !

As mentioned, cut, delete, change all outgoings to the minimum.

Joe_Bloggs

Further to Thrugelmir's stress test situation. If the existing rate were to rise then the repayments will go up.

1.5% £1283 Present day payment level 169K 12years. BoE +1%
2.0% £1321
2.5% £1360
3.0% £1399
3.5% £1439
4.0% £1480
4.5% £1521
5.0% £1563 up 280 per month.

I am not saying that the Bank of England base rate is going to be this high soon. As the term reduces and reduces the majority of the payment is capital and the interest becomes a diminishing consideration.

In a possible two years time
1.5% £1283 £142.9k @ 1.5% over 10 years BoE +1%
2.0% £1315
2.5% £1347
3.0% £1379
3.5% £1413
4.0% £1447
4.5% £1481
5.0% £1516 up £233

A rate increase is less expensive the closer you get towards the end of the term
J_B.

Wh05apk

I'm surprised no-one has suggested selling body organs yet!

Without patronising you, I would suggest you need to go back and get confirmation whether they can or can't adjust the term and retain the rate, most lenders would be able to do this, it would not be unusual if you were moving to port the deal and extend the term to keep within budget when increasing the borrowing, so I can't see the issue.

Thrugelmir

Wh05apk wrote: »

most lenders would be able to do this, it would not be unusual if you were moving to port the deal and extend the term to keep within budget when increasing the borrowing, so I can't see the issue.

Given the rate that the OP is currently on, i.e. 1% above base. Hardly surprising that the the lender doesn't wish to play ball by extending the term on business grounds alone.

Wh05apk

Thrugelmir wrote: »

Given the rate that the OP is currently on, i.e. 1% above base. Hardly surprising that the the lender doesn't wish to play ball by extending the term on business grounds alone.

This will not be declined on "business" grounds, the rate is irrelevant, I suspect this is because the person they have dealt with is not fully aware of the criteria/rules.

I also susppect that the person they have dealt with is targetted on new business, and something like this will get them no credit/bonus, but could take a lot of work, hence why they may not have fully checked their facts.

Thrugelmir

Wh05apk wrote: »

This will not be declined on "business" grounds, the rate is irrelevant,

Why? Banks are in business to make money. There's zero benefit to extending the term. As the bank will wait longer to be repaid the capital debt owed. When they would be better off lending the money to a new borrower at a higher rate.

Wh05apk

Thrugelmir wrote: »

Why? Banks are in business to make money. There's zero benefit to extending the term. As the bank will wait longer to be repaid the capital debt owed. When they would be better off lending the money to a new borrower at a higher rate.

So are you saying if the op had been on a different rate they would have extended it?

This would have been declined either on policy (regardless of product) or because the person dealing has the wrong info/hasnot/could not be bothered to check.

holly_hobby

Wh05apk wrote: »

I'm surprised no-one has suggested selling body organs yet!

Without patronising you, I would suggest you need to go back and get confirmation whether they can or can't adjust the term and retain the rate, most lenders would be able to do this, it would not be unusual if you were moving to port the deal and extend the term to keep within budget when increasing the borrowing, so I can't see the issue.

Porting a product is not a contractual right, but at the complete discretion of the lender (and subject to full uw if agreed) - to which they may of course reject the request, which if an extended term was required on tsf, I feel would most certainly be rejected in this case.

The OP does not want to move, but wants to extend the term - however the lender has no duty or legal obligation to permit this, BUT have agreed purely on a voluntary basis to do so - albeit the forfeit for their "favour" is that they won't allow the OP to retain the current product of BOE & 1% for the duration of the mge.

And to be quite honest in todays economic market who can blame them ... so their decision in removing the OP from the current product for the benefit of a term extension - is purely rate (profit) driven as Thurls and others have already discussed (assuming status criteria has been met of course).

If the OP wishes to retain the lifetime tracker they have, there is only one way and that is to leave the term as it is, re-evaluate their monthly ogings, and pare down non-essentials accordingly.

Simples ...

Hope this helps

Holly

Thrugelmir

Wh05apk wrote: »

So are you saying if the op had been on a different rate they would have extended it?

At 5% above base a totally different business proposition.

Though much would depend on the lenders policy at the time of application.

Burridge60

You are asking them to change the terms of your mortgage.

Why would they let you have a longer term on such a good rate?

Dont ask to borrow more as that will get a similar reply.

You are lucky they haven't gone to the FSA and asked for permission to revise the variable rate you are on.