Extending term of mortgage

Splishsplash_2

Hello all - I wonder if I might get your thoughts on my current situation please. I currently have c193k to pay on my mortgage and 15 years left on the term. My husband is a stay at home dad so I pay the mortgage alone. With the current situation I (like many others I am sure) have started feeling a little nervous about this situation and while I can pay the mortgage now with no problem am starting to worry about what would happen if I lost my job. I am wondering whether it might be prudent to extend the term now to bring down the monthly payments just in case and then continue to pay extra now to make up the difference between the lower amount and what I pay now. So that I only drop to the lower amount if we find ourselves in a situation where one of us has to take a lower paid job.

I haven’t spoken to the bank yet (which I would plan to) but I am thinking it will be easier for them to agree to extending the term while I’m in secure and higher paid employment. I don’t know this for sure though.

I am assuming that as long as I keep my payments the same by overpaying (wouldn’t be going above the repayment allowance) then there is no disadvantage to doing this if the best case scenario happened and my job remains secure.

The type of job I do doesn’t come up that often so if I were to be made redundant then it’s highly likely we’d be looking at a significant drop in income. 

Sorry this is long winded and hope it makes sense!

Thanks in advance! 

steve866

Sounds logical to me. I’m in the middle of applying for a mortgage to buy a new home and I’m going for 35 years to keep the payment low with the plan to over pay.

Are you in a fixed deal? I assume you won’t be able to do what you want to do easily until you are at a time of arranging a new deal. It will also depend on your age and retirement plans. 

Splishsplash_2

Thanks Steve and good luck with your mortgage! I’m in a fixed deal but looking at the Nationwide website it seems like you can extend the term at any time. Good point though perhaps that’s not the case. 🤔

Ps in case it’s helpful. House value is c500k and the mortgage is in two parts - both fixed in last summer for 5years. 

Splishsplash_2

And I’m 40. Plan to retire at 65...

steve866

Splishsplash_2 said:

Thanks Steve and good luck with your mortgage! I’m in a fixed deal but looking at the Nationwide website it seems like you can extend the term at any time. Good point though perhaps that’s not the case. 🤔

Ps in case it’s helpful. House value is c500k and the mortgage is in two parts - both fixed in last summer for 5years. 

That’s good that it says you can do that at anytime. Let us know how you get on if you proceed with it.

Socajam

Splishsplash_2 said:

Hello all - I wonder if I might get your thoughts on my current situation please. I currently have c193k to pay on my mortgage and 15 years left on the term. My husband is a stay at home dad so I pay the mortgage alone. With the current situation I (like many others I am sure) have started feeling a little nervous about this situation and while I can pay the mortgage now with no problem am starting to worry about what would happen if I lost my job. I am wondering whether it might be prudent to extend the term now to bring down the monthly payments just in case and then continue to pay extra now to make up the difference between the lower amount and what I pay now. So that I only drop to the lower amount if we find ourselves in a situation where one of us has to take a lower paid job.

I haven’t spoken to the bank yet (which I would plan to) but I am thinking it will be easier for them to agree to extending the term while I’m in secure and higher paid employment. I don’t know this for sure though.

I am assuming that as long as I keep my payments the same by overpaying (wouldn’t be going above the repayment allowance) then there is no disadvantage to doing this if the best case scenario happened and my job remains secure.

The type of job I do doesn’t come up that often so if I were to be made redundant then it’s highly likely we’d be looking at a significant drop in income. 

Sorry this is long winded and hope it makes sense!

Thanks in advance! 

I think that it a good idea
What I would do also is save up all the money and make one lump sum payment annually, instead of monthly.
That way if something unexpected were to happen, post corona virus, you will have the cash on hand.

Splishsplash_2

Thanks Socajam. That’s a really good idea. Such a worrying time. 

Thrugelmir

There's no need to change the mortgage at the moment. If anything focus your efforts on overpaying by whatever you are able to. Little point in worrying about something until it actually happens.