Possible to get a tiny mortgage over a long term?

VodkaSorbet

I owe less than £15k on a Nationwide mortgage (on a house currently worth ~£300k), with about 7 years left on the original term (term was reduced by overpayments).

I don't want to pay it off completely as it's at an advantageous rate and I may want to borrow back some of the overpayments, but I am no longer getting more interest on the money I keep in savings to pay it off than I am paying on the mortgage.

So my question is, do lenders allow such a thing as paying off all but say 2k of the mortgage, and extending the term so I can keep the mortgage for a longer time but still benefit from paying very little interest (if that makes sense)?

Just wondered if that was a feasible proposition before asking the provider.

Thanks.

ACG

If you asked a lender if they would do it, they would probably say no - interest on a £2k loan over 20 years is peanuts and it will cost them more in time and costs.

It probably can be done, but it would likely need to be an offset mortgage which tend to cost a little more than a normal mortgage.

I know it is a money saving website, but I am not sure the time and effort will be worth the amount you will save.

VodkaSorbet

Ah OK, thanks for that information.

glosoli

The problem you would have is:

1) If you extended the mortgage term, you would have to move on to a rate of interest that was available today, and lose your "advantageous" rate,

2) By swapping on to a new product, you would likely lose the ability to "borrow back" any over-payment's you have previously made, and you would have to go through subsequent additional borrowing applications each time,

But otherwise, it may be possible for you to extend the mortgage term as long as you agree to the above, but even at that, I cannot see a mortgage adviser recommending it as you can clearly afford to pay it off.