Mortgage providers minimum terms (3 years)

typeractive

Hi everyone,

Hope everyone is looking forward to the long weekend

I'm not sure if this is the best place for this thread or if I should be in the mortgage free wannabe thread? Perhaps the mods / admin can help if I'm in the wrong spot. 

In brief my existing provider (Barclays) have the 'best' rate when looking through MoneySupermarket etc. However, because I want to reduce the mortgage term (currently 6 years) down to 3 years with a fixed rate they cannot offer me the deal as the overall minimum term is 5 years. So does anyone know of a provider who will do a 3 year fixed rate without such a term?

The alternative is to look for a 5 year fixer with no restriction on overpayments and then I regularly overpay. I'd be interested in those providers too.

Or another idea is a loan, pay it off, and then payback the loan.

Hope I'm making sense, any help would be appreciated as it saves speaking to every. single. bank. only to find they all have this clause.

Thanks!  

Thrugelmir

Set the mortgage term at 5 years. Take a 3 year fix and overpay by the maximum allowed. At the end of the 3 year term clear the remaining balance from savings. 

typeractive

Cheers @Thrugelmir, any advice on providers that allow large overpayments?

Thrugelmir

Most lenders allow a 10% overpayment per annum. 

DevilsAdvocate1

You could take out an offset mortgate with a company like First Direct (I think only 2 banks do this and can't remember the name of the other one).  I have an interest only offset mortgage with them and have been putting as much into the account as I can.  I currenlty have around £17,000 left from a £110,000 mortgage which has another 10 years to run. I reckon it will be paid off by this time next year. but might withdraw the money at that point to purchase something else as I'm thinking about getting solar panels.  When I'm ready I can just transfer the money from the mortgate to my current account.

You can overpay as much as you like and can withdraw the money if something unexpected comes up.  So you have full flexibility.  For example, I might withdraw the money to purchase something else as I'm thinking about getting solar panels.  When I'm ready I can just transfer the money from the mortgate to my current account.  Interest is charged on a daily basis, so you can massively reduce how much interest you pay by overpaying into the account.  Also, its linked to my current account, so any money in there effectively reduces my mortgage and reduces my daily interest charge.  This makes a difference on pay day until all my bills come out.

Some people take out 0% interest credit cards and then withdraw from the credit card and put the money into the mortgage account.  This reduces the daily mortgage debt and thus the interest.  The money is still available to withdraw when the 0% deal comes to an end.

getmore4less

typeractive said:

Cheers @Thrugelmir, any advice on providers that allow large overpayments?

Barclays.
On top of the 10% you can do overpayment upto 3 times the normal payment.

longtimelurker2020

typeractive said:

Cheers @Thrugelmir, any advice on providers that allow large overpayments?

First Direct allow unlimited overpayments, even without an offset mortgage. There’s no cap on how much you can overpay each year.