Re-mortgage - reset to 25 years?

deegee1971

After divorcing, I bought a new place and took on a mortgage 2 years ago, with a 25 year term (I'm 45 now). As my fixed rate is ending in Jan, I'm using the same lender to get a new fixed rate deal.
I've found the deal I want, but just wondered if it makes more sense to continue with 23 years or reset to 25? The difference is only around £50 per month but that could be useful. I doubt I'll ever have a mortgage that long, as I'll move to something smaller when kids leave home which will likely leave me mortgage free anyway.

muhandis

If you're staying with the same lender, most lenders will let you do a non-advised product switch online without a new affordability assessment or credit check as long as there is no additional borrowing or change in term.

If you've found a deal you like, given that it's only a £50/month difference, in your place I would take the more hassle-free option.

deegee1971 wrote: »

After divorcing, I bought a new place and took on a mortgage 2 years ago, with a 25 year term (I'm 45 now). As my fixed rate is ending in Jan, I'm using the same lender to get a new fixed rate deal.
I've found the deal I want, but just wondered if it makes more sense to continue with 23 years or reset to 25? The difference is only around £50 per month but that could be useful. I doubt I'll ever have a mortgage that long, as I'll move to something smaller when kids leave home which will likely leave me mortgage free anyway.

deegee1971

Sorry, I don't think I explained very well.
I'm happy with staying with my current lender. I'm just wondering whether to remortgage with the same term remaining (23 years) or reset to a new 25 year term.

ViolaLass

deegee1971 wrote: »

Sorry, I don't think I explained very well.
I'm happy with staying with my current lender. I'm just wondering whether to remortgage with the same term remaining (23 years) or reset to a new 25 year term.

Try reading post 2 again, muhandis gave you an answer.

Thrugelmir

What contingency plans do you have for a future rise in interest rates. That £50 a month could help mitigate potential issues in the future. Personally I would never want a mortgage commitment until I'm 70. So many potential pitfalls.

TheShape

In 2015 I changed my mortgage term from 8 years remaining to 30 years. 8 years was probably unaffordable anyway but 12 years would have been affordable.

My thinking was that the length of term brought the payments down so much that I could afford to overpay an amount that would have bought the term down to 12 years anyway and shoukd I suffer a drop in income, the lower payments would be more affordable.

I've ended up simply saving the difference.

Whether it's worth the change from 23 to 25 years depends on the cost/effort involved.

deegee1971

Thanks TheShape

I'm still not sure I'm explaining my query to others though. There is no more or less hassle-free option - they are both with the same lender.

I'm just deciding between 2 deals with Santander
2yr fixed at 1.69% - £0 fee - £599 per month (23 year term)
2yr fixed at 1.69% - £0 fee - £556 (25 year term)

amnblog

deegee1971 wrote: »

I doubt I'll ever have a mortgage that long

As does everyone

NOVAMET21

deegee1971 wrote: »

Thanks TheShape

I'm still not sure I'm explaining my query to others though. There is no more or less hassle-free option - they are both with the same lender.

I'm just deciding between 2 deals with Santander
2yr fixed at 1.69% - £0 fee - £599 per month (23 year term)
2yr fixed at 1.69% - £0 fee - £556 (25 year term)

I would go for the 23 year term considering you are in you late 40s.


I got the same interest rate offer of 1.69% from Santander. A huge drop from 2 years ago when it was 3.49% but mind you my house price has increased massively so LTV is way less.

muhandis

Sorry if my reply wasn't clear.

1. When switching products and staying with the same lender, if you do not change the remaining term, the switch will most likely just amount to a checking a few boxes and a few clicks online.

2. But if you want to increase your term when switching products, that will in all likelihood mean that your lender will need to reassess affordability so do a new affordability calculation (income, payslips, bank statement, etc) and a credit check.

Which is what I meant when I said that in your place I would choose the hassle-free option 1 rather than do 2 for £43 less a month

deegee1971 wrote: »

Thanks TheShape

I'm still not sure I'm explaining my query to others though. There is no more or less hassle-free option - they are both with the same lender.

I'm just deciding between 2 deals with Santander
2yr fixed at 1.69% - £0 fee - £599 per month (23 year term)
2yr fixed at 1.69% - £0 fee - £556 (25 year term)

NOVAMET21

muhandis wrote: »

Sorry if my reply wasn't clear.

1. When switching products and staying with the same lender, if you do not change the remaining term, the switch will most likely just amount to a checking a few boxes and a few clicks online.

2. But if you want to increase your term when switching products, that will in all likelihood mean that your lender will need to reassess affordability so do a new affordability calculation (income, payslips, bank statement, etc) and a credit check.

Which is what I meant when I said that in your place I would choose the hassle-free option 1 rather than do 2 for £43 less a month

Yes, when I tried mine there was no option to either increase or decrease the mortgage term.


So if you want to increase or decrease the term then maybe you have to speak to the lender.