Few mortgage questions

lydriver

Do any fixed rate mortgages also have a fixed revert rate?

I'm thinking of taking out a 10 year fixed rate mortgage but having the mortgage over a longer period with the intention of overpaying and having it paid off within the 10 year fixed period.
The reason for doing this is to make the payments lower, peace of mind thing really.

apart from poor discipline and not making overpayments, is there any disadvantages to this plan?

Let_Us_See

No, they don't.

TrickyDicky101

If you take out a 10 year mortgage with the intention of overpaying to the extent of fully paying off that mortgage within the 10 years then be sure that you don't breach any overpayment limits. Assuming the mortgage will allow 10% overpayments per year then you should be fine - but some providers have arbitrary limits such as £500 per month, which, depending on the size of mortgage, might restrict your ability to overpay (without additional fees/charges).

lydriver

do the overpayments allowed reduce as the mortgage balance reduces?

The one I'm looking at allows 5% overpayments, so for 50k mortgage you could pay an extra 2500 in the 1st year, what after that?

capwhitt

10 years fixed rate can be pretty poor value. Yes house prices are increasing but in a few years your LTV will improve a lot and will put you in a stronger position for better rates.

Thrugelmir

lydriver wrote: »

The one I'm looking at allows 5% overpayments, so for 50k mortgage you could pay an extra 2500 in the 1st year, what after that?

Would then be 5% of the balance owing at the start of year 2. So if the balance owed was £45,000. Max overpayment allowed would be £2,250.

lydriver

Thanks.

I don't have the exact figures to hand just now but if I took out a mortgage for 10 years with a 10 year fixed rate and the repayments were £400.....
then by taking out a mortgage for the same amount over, say 15 years on the same initial 10 year fixed period deal, then overpaying so the payments equal £400 a month then the mortgage should be paid off with the same amount of interest accrued after 10 years?

lydriver

that probably didn't make a great deal of sense....

is there an easy way to work out the minimum term a mortgage could be reduced to by making overpayments?

or do you need to subtract the monthly payments, then the overpayment % allowed for each year?