Mortgage term adjustments

Ilovescience85

Hi, I've been on the nationwide variable since our deal ended in 2010. I'm concerned the rate will go up next year and I was looking at the online switcher.

I have 17 years left at present but if I increase the term to 30 years it drops the monthly payment by £160 on a 4 year fixed deal.

Money is a bit tight at the moment and the extra cash would come in handy, what happens if I choose the increase the term then choose the reduce it back once the fixed deal is finished in 4 years?

Any help would be greatly appreciated.

Yorkie1

If you choose to increase the term then you'll end up paying less per month but more overall, because of the longer time in which capital is repaid / interest is charged.

You will not be able to use the online switching facility if you want to alter amount borrowed or length of term. You will essentially have to go through the full affordability assessment, with uncertain outcomes depending on your present outgoings.

Assuming you do get a longer mortgage, then when you are ready to reduce term you can either go through the same affordability process again, or simply overpay (within the permitted limits to avoid paying an early repayment charge) with discipline to achieve the same effect.