please help with re-mortgage decision

mo._2-2

hi to all. I have 16 years left on my mortgage,i needed £7,000 so got a deal with another lender to give me a better mortgage deal,but my new mortgage will be for 27 years instead,(and it was only £120 a month better off (not worth it,but i need the 7k)

i was told after a year or 2 i could reduce my 27(which will be 25 then) years to 16 years without any issues,or any other checks is this true?

Should i do it? Ive heard that as ive only got 16 years with my current lender,its better to stay,as at 16 years the motgage rate/payment go down quicker.

This was a high street mortgage shop who gave advice.

GMS

Are you trying to borrow an additional 7k?

Why extend the term now? Is it for affordability reasons?

How much do you need in total? How much is the property worth?

mo._2-2

Thanks for the super quick reply!
i needed 7k to do some home improvements and put some towards a car,i didnt want to extend but,i was told i can only have the 7k if i extend to 27 years,due to affordability.
But once i get the motgage a year or 2 later i can take my say 27 years to 16.

Can i take my term from 27 years to 16 just like that? no questions asked or is it a bit more complicated?

originalmiscellany

Are you allowed to overpay? If you can, and are able to, aim to do that I would say, so you can shorten the mortgage asap;

getmore4less

What rate is your current mortgage

What rate will the new one be.

they could be hiding the higher costs by extending the term to make it look cheaper.

What is the outstanding mortgage, house value and income

mo._2-2

originalmiscellany wrote: »

Are you allowed to overpay? If you can, and are able to, aim to do that I would say, so you can shorten the mortgage asap;

i will be allowed to over pay,at 16 years now i pay £600 per month, in 2 years when i have 25 year term(on new mortgage) l i can pay £600 instead of what will be £476.

Over payment is not the issue.
I want to know 2 things

1. can i walk into my bank in 2 years and say: ive got 25 years left,please reduce it to 16 years ?

Will it be straight forward or will they again check affordability and stuff?

2. if ive got 16 years left now,is it true that interest rates start droping,making it easier to clear the balance or doesnt the term matter?

mo._2-2

getmore4less wrote: »

What rate is your current mortgage

What rate will the new one be.

they could be hiding the higher costs by extending the term to make it look cheaper.

What is the outstanding mortgage, house value and income

4.64
outstanding 80k value 120k income 19.7k

getmore4less

mo. wrote: »

4.64
outstanding 80k value 120k income 19.7k

that should be around £591pm

adding £7k would be £643

over 27years £471

if you pay at £601 the term will be 17years 9months

mo._2-2

getmore4less wrote: »

that should be around £591pm

adding £7k would be £643

over 27years £471

if you pay at £601 the term will be 17years 9months

sound ok,they wont give me 16 years only 27 at new rate

any chance you can answer the 2 q's i have below please?

. can i walk into my bank in 2 years and say: ive got 25 years left,please reduce it to 16 years ?

Will it be straight forward or will they again check affordability and stuff?

2. if ive got 16 years left now,is it true that interest rates start droping,making it easier to clear the balance or doesnt the term matter?

getmore4less

NO one can tell you if the lender will allow you to change contracual term in 2 years.

BUT contractual term does not matter it just sets the minimum payment, it is the payment that determines the real term if you make the 601 the term will be 17 years 9 month


The question you need to know the answer to is can you overpay with out penalty to the level you want?

mo._2-2

getmore4less wrote: »

NO one can tell you if the lender will allow you to change contracual term in 2 years.

BUT contractual term does not matter it just sets the minimum payment, it is the payment that determines the real term if you make the 601 the term will be 17 years 9 month


The question you need to know the answer to is can you overpay with out penalty to the level you want?

sorry if im sounding a bit thick.
If i take the new mortgage,it will be fixed for 2 years,

say for example my payment is £471 per month and i have 25 years left,(after2 years) if i pay £600 per month every month,that will automaticaly reduce the years? is that what your saying?