Split Mortgage over 15 or 20 years

rubyberrie

I need to get a mortgage for £175K and have 2 endowment policies that will pay out approx. £55K in 9 years time. So to keep the monthly repayments down as much as possible, I aim to have 55K on interest only and the rest on repayment.

In theory sounds good, however, due to my age, if I have it over 20 years, it will take me well into retirement age. Abbey in principle will do this for me, although I am currently waiting for something to clear off my credit report so there is a bit of a holdup

In the meantime, my mortgage broker has found similar option with the Halifax as they are less fussy about the loan appearing on credit report providing it has been cleared by time of Agreement in Principal. However, they are more fussy about my age (now 54) and will only offer mortgage over 15 years, obviously making the monthly repayments much higher, which I want to avoid.

My mortgage broker has said that the facts and figures have been calculated on the Halifax's automated system and if he can speak to the underwriter, he may be able to get them to change it to 20 years, but it is not guaranteed.

Has anyone else in this position and managed to get their mortgage increased from 15 to 20 years?

ValHaller

Because of your age, getting this paid off must be a concern. Indeed, if you are wanting to keep your payments within limits, repaying the mortgage beyond retirement may not be sustainable.

In your position. I would want to be 100% repayment from the outset and use the £55k to reduce the loan later - and I would cut my cloth accordingly, borrowing less than £175k if necessary. After the £55k is cleared, you could overpay and reduce the term.

Thrugelmir

How would you fund a £120k mortgage into retirement?

Do you have a sizable pension plan in place?

rubyberrie

Thanks that has given me some food for thought, although I do have quite a good pension, so I was hoping to take a lump sum depending on what is left to pay.... the other option is to downsize at a later date.

Thrugelmir

rubyberrie wrote: »

the other option is to downsize at a later date.

Then a lender could say that you aren't really in a position to afford a 20 year term.

rubyberrie

Thrugelmir wrote: »

How would you fund a £120k mortgage into retirement?

Do you have a sizable pension plan in place?

Hi Thrugelmir, apparently I do, but by that time, I may be ready to downsize anyway. I just want to keep my present home as long as possible. I am remortgaging due to divorce.

ValHaller

rubyberrie wrote: »

Hi Thrugelmir, apparently I do, but by that time, I may be ready to downsize anyway. I just want to keep my present home as long as possible. I am remortgaging due to divorce.

If long term you anticipate downsizing, I suggest you look to do this earlier rather than later. An oversize mortgage means you will bleed money away in interest which would be better put to the eventual downsized home.

At your age, things change from live now and pay later to pay now and live later