Re-mortgaging at end of term

saucer

Hi folks
We have a flexible mortgage with First Direct which is repayable in just under 6 years, at which point I, as the main income person, will be 54. It was originally a 14 year term. The interest rate until then is BoE + 0.49%. As the interest is so low, we have operated the mortgage on an interest only basis because it has made more sense to save in other accounts and in pension. The mortgage is 135k and the property is worth about 550k so lots of equity.

My question is whether we are likely to have any problem either extending the mortgage term beyond the original term, or remortgaging with someone else. We will have a fair chunk available to pay off but there is likely to be a significant gap (c.60k) remaining to be repaid, especially given kids coming into uni years. We have a good income and I don't see affordability being an issue if remortgaged. The next question is whether to wait or do it sooner, but at the loss of a great interest rate. Thanks for your thoughts

saucer

...apologies for bumping! My basic question is whether there is likely to be any problem re mortgaging to a e.g. 5 year repayment to cover the shortfall in capital repayment on an interest only mortgage at the end of full term,. Am I being naive/overly optimistic? Many thanks.

AnotherJoe

saucer wrote: »

...apologies for bumping! My basic question is whether there is likely to be any problem re mortgaging to a e.g. 5 year repayment to cover the shortfall in capital repayment on an interest only mortgage at the end of full term,. Am I being naive/overly optimistic? Many thanks.

That will depend upon your salary at the time.

In the meantime I certainly wouldn't be messing with the mortgage deal you have, keep that deal as long as you can. As you say focus on pension and savings for now.

getmore4less

Your problem seems to be you have failed to balance the saving vehicles to be sure you can pay it off.

First option is will FD extend the full term of the current deal.

saucer

getmore4less wrote: »

Your problem seems to be you have failed to balance the saving vehicles to be sure you can pay it off.

First option is will FD extend the full term of the current deal.

I spoke to FD today who implied that I should be able to both extend the term and keep the current interest rate, as long as I meet affordability criteria. I will go through the process with them; I hadn't imagined this would be possible without switching to the kind of deal being offered at the moment.


It is true that we are not putting enough in ordinary savings to repay at term, but will have significant pension savings that will be accessible at the point it needs to be repaid. Thank you for your thoughts