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Mortgage ending in 9yrs - help 😬

Any help appreciated. Bought my former property in 2004 for 315k. Hit problems with my work (unexpectedly) therefore stayed on interest only repayments for many years until financially sound again. Long story short is, I’ve been making overpayments of £1000pm for three it four years now. Mortgage is still £237k and I’m paying it off at a rate of 10k-ish per year. Clearly this is going to leave me a problem when this mortgage ends. What are my options please. Continue with the 1k overpayments each months for the next 9yrs and remortgage at that point? Or try and put something in place before then/right now? Remortgage?

Thank you for any advice. 
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Comments

  • Edi81
    Edi81 Posts: 1,502 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    how old are you? do you earn enough to support a mortgage of £237k?
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    With £1400pm available £237k @ 1.5% needs 16years.
    How much can you afford each month? 
    One issue with restructure now is you will probably lose the interest only option committing you to higher payments. 
    If your age allows for at least a 16year mortgage and you can find 1400pm there will be options.





  • silvercar
    silvercar Posts: 49,805 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    1.Remortgage now to a longer term
    2. Wait and see, with a few years of high inflation you may find your income will increase rapidly and you can afford higher repayments.
    3. Plan to sell up nearer the time
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • big_gus
    big_gus Posts: 54 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Edi81, I’m 44. Sole trader, turnover always just under VAT level with income always around 20k. 

    GetMore4Less: currently on interest only but pay £1000 overpayment each month. I could make this £1400 (just about). Do you suggest remortgaging now/soon to a new 16yr mortgage with £1400 as my repayment amount each month (switching from interest only)? I’d be happy to have it paid off by 60. I have other savings I can use if required. 

    Silver car: I don’t really want to sell that property. It’s kind of my one thing I can leave my son (he’s 10). 

    Thank you for your help and input. I really am unsure of best options. 
  • zagubov
    zagubov Posts: 17,938 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    silvercar said:
    1.Remortgage now to a longer term
    2. Wait and see, with a few years of high inflation you may find your income will increase rapidly and you can afford higher repayments.
    3. Plan to sell up nearer the time
    This ^^^^^.
    You now need a repayment mortgage which are often at a lower rate than an Interest-Only one. We did that and won't be paid off until I'm 65, but we're on two incomes. 
    But what's the panic?
    Do you own your own property? Can you not pass this on?
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
  • sparks6
    sparks6 Posts: 23 Forumite
    10 Posts Second Anniversary
    You're only 44. Remortgage to a longer repayment term and if your overpay on this you will reduce your term anyway. what are your earnings like, do you pass the affordability calculator?
  • ian1246
    ian1246 Posts: 424 Forumite
    Seventh Anniversary 100 Posts Name Dropper
    If your only 44, remortgage to a repayment mortgage until 67 (23 year term). This will bring your fixed monthly mortgage amount down - giving you flexibility should work become unsteady again. If you have extra £££ each month, you can continue overpaying (most mortgages allow 10% of the remaining balance to be overpaid), but at least if work does drop off, you wont be committed to such high payments.

    What are your pension provisions like if you had a period of time where work was unstable? Pension is just as important as mortgage - so it might be worth rediverting some of the spare £££ towards increased pensions rather than overpaying, depending on what they are like!
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    edited 5 June 2020 at 5:39PM
    big_gus said:
    Edi81, I’m 44. Sole trader, turnover always just under VAT level with income always around 20k. 

    GetMore4Less: currently on interest only but pay £1000 overpayment each month. I could make this £1400 (just about). Do you suggest remortgaging now/soon to a new 16yr mortgage with £1400 as my repayment amount each month (switching from interest only)? I’d be happy to have it paid off by 60. I have other savings I can use if required. 

    Silver car: I don’t really want to sell that property. It’s kind of my one thing I can leave my son (he’s 10). 

    Thank you for your help and input. I really am unsure of best options. 
    the inteest is going to be around £400 thats 1400 with the overpayment that is why I used that s an initial estimate.
    If £1400 may be an issue, you have no buffer to get you through a lean time then at 44yo you could look at longer than 16 years still  overpay as much as you can to generate the buffer in the future.
    Rates can go up but for now that is not looking too likely for a while..
    £237k @ 1.5%
    10y £2150
    15y £1500
    20y £1150
    25y £950
    Is now the right time to be committing to a higher payment?
    Lower payment and save is another option but you need a decent rate for that.
    Pension can be a tax efficient way to pay the mortgage debt later in life.
    With your declared income/profit qualifying for a £237k may be an issue.
  • ACG
    ACG Posts: 24,690 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Your income is £20k and you are overpaying your mortgage by £12k a year...
    Add in your interest only payment and that leaves you around £5k a year for food, bills, travel etc? 

    Sorry if I am way off the mark but I cant help but think you probably have a a fair bit of cash in hand work - you cant get a £230k mortgage on £20k a year. So your only option is to carry on doing what you are doing until you either increase your income/declare the correct income/bring the balance down a lot unless you want to sell up. 
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • CheesyWiggles
    CheesyWiggles Posts: 76 Forumite
    Fifth Anniversary 10 Posts Combo Breaker
    edited 5 June 2020 at 9:40PM
    ACG said:
    Your income is £20k and you are overpaying your mortgage by £12k a year...
    Add in your interest only payment and that leaves you around £5k a year for food, bills, travel etc? 

    Sorry if I am way off the mark but I cant help but think you probably have a a fair bit of cash in hand work - you cant get a £230k mortgage on £20k a year. So your only option is to carry on doing what you are doing until you either increase your income/declare the correct income/bring the balance down a lot unless you want to sell up. 
    I’m glad I’m not the only one that noticed that. 20k after tax is more like 1430 per month, so would leave 230 per month for everything else including the base mortgage amount if overpaying by a grand. Must be a fairly complicated financial situation OP, but very hard to help without a better understanding of your situation.
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