Remortgage - minimum term?

PixieTootles

Hello everyone
My current fixed rate mortgage deal comes to an end in 6 months so I will be looking around for a new deal.  I currently have 9 years left on the term.  However, I want to use some of an inheritance to pay off a lump sum before I renew my fixed rate mortgage.  This would reduce my term to 3 years.  My question is can I look for a new 3 year fixed mortgage.  I've been told that the minimum term for a mortgage is 5 year - is this true?

la531983

Been told by whom?

My lender (Barclays) offer 2, 3 and 5 year fixed rates to its existing customers but many of them require a minimum balance.

PixieTootles

I was told by a mortgage advisor  

la531983

PixieTootles said:

I was told by a mortgage advisor  

Just take a rate from your existing lender, why bother with the hassle of moving it unless its going to save you a shedload once the fees have been taken into account?

DE_612183

Think the OP is asking for the 3 year term - not a 3 year fixed.

You could try a mortgage broker, but I suspect the reason is that there is not enough value in a 3 year product for a high street lender to do this.

Whats the outstanding capital?

Why not just take the lowest rate you can get, make over-payments to clear within 3 years - if you use a tracker or offset there are not normally any ERC for over-payments.

la531983

I see. Well yes they are likely restricted to rates offered by their existing lender then if they are wanting to refinance to a three year term after the lump sum.

amnblog

Lenders do not consider mortgages as short term products. Therefore, you will generally find they expect a mortgage to be in force an outset a minimum 5 years - therefore your Broker is correct.

This issue, however, is not about the term of the mortgage contract, it is about the terms of the product and your ability to overpay and/or settle the borrowing short term.

Using a Broker is the correct route for you.