Mortgage Rate Rises

[grudas]

what term can you realistically get? I'm 33 so I'm sorta hoping to extend it to as far as I can so my monthly commitment is low and just over-pay what I can.

we're due to for renewal mid'25..

 

[BUDFORCE]

what term can you realistically get? I'm 33 so I'm sorta hoping to extend it to as far as I can so my monthly commitment is low and just over-pay what I can.

we're due to for renewal mid'25..

Ages these days.

It's been a few years since I did residential mortgages but I'm aware some lenders going up to like 85-90 years old.

I would have e though with even most mainstream lenders you could get a 35-40 year term at 33.

 

[fez]

Lenders know that people in their 30s now will never be able to retire.

 

[slinxy]

I think you can change up until the day the mortgage actually kicks in, so I locked in a few for mine and just jumped a better (or less worse) one when they became available.

You can change even after the mortage kicks in during the cooling off period... I'm sure the bank will hit you would a charge but it may still be cheap that having it locked in for 5 years.

 

[dlockers]

what term can you realistically get? I'm 33 so I'm sorta hoping to extend it to as far as I can so my monthly commitment is low and just over-pay what I can.

we're due to for renewal mid'25..

They allowed me to go to 70 y/o without any additional checks. She said over 70 they run a credit check/would need paperwork.

 

[grudas]

They allowed me to go to 70 y/o without any additional checks. She said over 70 they run a credit check/would need paperwork.

ah right, yeah I was thinking 30-35. My other half is 35 so we should be good for 30 year term.

 

[jaybee]

Just sanity checking...

There is no penalty to going for a nice long term upon renewal, to get the mandatory required monthly payment down to as low as possible, if you then aim to overpay significantly over time?
The longer you take to pay it off obviously hurts you with more and more interest, but essentially, to keep renewing at 30 years every 5 years, is a good tactic to protect you if you say lose your job and can only afford lower repayments for say 6 months?

 

[BUDFORCE]

Just sanity checking...

There is no penalty to going for a nice long term upon renewal, to get the mandatory required monthly payment down to as low as possible, if you then aim to overpay significantly over time?
The longer you take to pay it off obviously hurts you with more and more interest, but essentially, to keep renewing at 30 years every 5 years, is a good tactic to protect you if you say lose your job and can only afford lower repayments for say 6 months?

Yes but....... Most mortgages only let you pay 10% extra without ERCs

So if you do find yourself with more disposable income you've effectively locked yourself into paying that interest back.

But in general yes it's a good strategy.

You can of course put the extra if you did come into some extra money into some form of savings instead.

 

[grudas]

Just sanity checking...

There is no penalty to going for a nice long term upon renewal, to get the mandatory required monthly payment down to as low as possible, if you then aim to overpay significantly over time?
The longer you take to pay it off obviously hurts you with more and more interest, but essentially, to keep renewing at 30 years every 5 years, is a good tactic to protect you if you say lose your job and can only afford lower repayments for say 6 months?

yeah fine to do but like @BUDFORCE said, really depends on how much you've got left.. my mortgage is chunky with 380k left so 10% overpayment limit is not an issue.

 

[dlockers]

yeah fine to do but like @BUDFORCE said, really depends on how much you've got left.. my mortgage is chunky with 380k left so 10% overpayment limit is not an issue.

Came to say the same thing.

 

[jaybee]

My remaining balance is over 300K so maximum over repayment limit is not an issue for a long, long time for us.

 

[Whitewater]

10% per 12-month period starting the day our switch kicks in and it refreshes every year, rather than 10% total.

 

[CaptainRAVE]

what term can you realistically get? I'm 33 so I'm sorta hoping to extend it to as far as I can so my monthly commitment is low and just over-pay what I can.

we're due to for renewal mid'25..

We’ll probably extend, currently on 21 years taking us up to 60, but we can extend it to 70 with no checks. We’re in a slightly unusual situation, so it’s a no brainer for us. I’ll have it paid off long before then anyway, but they don’t need to know that

 

[TNA]

We’ll probably extend, currently on 21 years taking us up to 60, but we can extend it to 70 with no checks. We’re in a slightly unusual situation, so it’s a no brainer for us. I’ll have it paid off long before then anyway, but they don’t need to know that

Doesn't matter anyway. All they care about is the fixed period you signed up to I would imagine. You might be with multiple banks before it is paid off.

I even tell them I set it to 30 years only to keep payments lower just in case, but fully intend to overpay. Well, that was the case when interest rates were lower anyway.

Right now better of at the very least sticking it in a fixed isa and maxing that out. Firstly you get higher interest that way, secondly if you lose your job or something you have a long runway.

 

[dlockers]

Right now better of at the very least sticking it in a fixed isa and maxing that out. Firstly you get higher interest that way, secondly if you lose your job or something you have a long runway.

This right here --- I haven't had a rainy day fund for years now. Pushing it to longest possible means we can bank the diff and create a new emergency pot. The value of the security even if rates drop makes it a no brainer for me. Currently at 5% in ZOPA luckily, but I'd probably hold a big pot even at 3.5%.

 

[delta0]

Lenders know that people in their 30s now will never be able to retire.

I’m sure they will still retire but if they want to retire earlier then it will take commitment that many won’t be willing to make.

 

[CaptainRAVE]

Done. Locked in for 5 years at 4.3% (which can probably be changed up to the end of October if needed) and extended until 70, resulting in a net increase of £60 per month. I’ll take that tbh, I was expecting to pay far far more and I’ll pay it off long before then anyway.

Thanks for the feedback everyone.

 

[slinxy]

I didn't have my first mortage till I was 35... it's just a case of what they call "affordablity", can I pay off my mortage, either with or without the use of my pension.. yes.

There is a school of thought that is cheaper to rent in the long term, I don't believe in that but I do think anyone in their 20s having a mortage just ties you down to a job, region and lifestyle... enough of my friends "settle", got married or moved in with partners and got a mortage, only for it to go pear and having to deal with the very un-liquid asset of a house.

 

[Soulja]

It's getting closer and closer to my fixed term ending and I'm unsure if I should lock in a 5 year term at 4.15% or a 2 year deal at 4.65%. The difference in my monthly payment between the two would be £21, but I'm thinking surely the rates will drop some more over the next 2 years and I'll be able to fix at a better rate in 2 years time? But then a part of me thinks it would be wiser to fix in for 5 years just to be safe should something happen in the world that causes inflation etc to spike again.

 

[dlockers]

It's getting closer and closer to my fixed term ending and I'm unsure if I should lock in a 5 year term at 4.15% or a 2 year deal at 4.65%. The difference in my monthly payment between the two would be £21, but I'm thinking surely the rates will drop some more over the next 2 years and I'll be able to fix at a better rate in 2 years time? But then a part of me thinks it would be wiser to fix in for 5 years just to be safe should something happen in the world that causes inflation etc to spike again.

If half a percent is only worth £21 a month to you, I'd stick on 5 years and just forget about it. I mean even if they went to 3.15% you're still only up £40/mo?