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Fixing for longer than outstanding term

Options
Is it possible to choose a fixed rate product that is longer than the outstanding term of a mortgage?

Thanks 😊 

Comments

  • MovingForwards
    MovingForwards Posts: 17,148 Forumite
    10,000 Posts Seventh Anniversary Name Dropper Photogenic
    What would it be fixed to after the mortgage is paid off?
    Mortgage started 2020, aiming to clear 31/12/2029.
  • Is it possible to choose a fixed rate product that is longer than the outstanding term of a mortgage?

    Thanks 😊 
    Seems quite unlikely. Why would you need to fix it for longer than the selected term? 
  • Burnley_Lad
    Burnley_Lad Posts: 277 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Thanks both for your replies.

    Looking at my options, I can fix for 5 years and have uncertainty for the remaining two years of the mortgage (and more than likely pay a higher rate than what I can fix for now), or fix for 10 years at the same rate and have certainty in what rate I will be paying for the rest of the mortgage.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The product cannot exceed the remaining contractual term of the mortgage. 
  • Burnley_Lad
    Burnley_Lad Posts: 277 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Thanks for your reply.
  • Why don't you extend the term to 10 years but over pay so it's paid off in 7?
  • MovingForwards
    MovingForwards Posts: 17,148 Forumite
    10,000 Posts Seventh Anniversary Name Dropper Photogenic
    Take the 5 year fix and overpay to clear it within that term.
    Mortgage started 2020, aiming to clear 31/12/2029.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    edited 21 March 2022 at 6:30AM
    By year 5 the amount owing will be a lot lower so the increased rate on a small amount could well be less than the increased amount on the higher rate for the previous 5 years.

    Pretty easy to calculate.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Take a nationwide retention best rates on 5y, 10y to be paid off in 7y
    1.99% and 2.09%.

    on £50k paying £640pm

    Mortgage £50,000
    payment £640 ERC/FEE
    rate 1.99% £0
    new rate 2.09% £0
    Time Years months
    Left on current 5 0
    New fix term 7 0



    amount left after(months) 60
    Start rate End
    £50,000 1.99% £14,886
    £50,000 2.09% £15,062



    amount left after(months) 84
    £50,000 1.99% -£166
    £50,000 2.09% £32



    Switch when ERC £0
    Break even rate needed no fee and fee) 24
    £14,886 3.223% £32

    Get it wrong and it won't cost a lot(left after 7y) even if rates went to 6% its only ~£500(before any overpayments).
    £14,886 2.00% -£165
    £14,886 3.00% -£4
    £14,886 4.00% £160
    £14,886 5.00% £329
    £14,886 6.00% £503


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