You can apply to extend the term of your mortgage to reduce your monthly payments. The agreed duration of the term extension will depend on how long you have remaining on your mortgage term and your expected retirement age. You cannot extend the term past your expected retirement age.
If you think this option is right for you, you can submit your application and our team will contact you to give you a personalised illustration and confirm the agreed term extension period. Your credit score won’t be impacted by choosing this option and you’ll continue to make full payments at the end of this time. You can choose to switch back to your original mortgage term within 6 months of the term extension.
Here’s an illustrative example of how this could work, based on a mortgage balance of £100,000, a fixed rate interest of 6%, 10 years remaining on the mortgage account and choosing to extend the term for a further 10 years:
- Monthly mortgage payments are £1,110 each month
- Extending the term of your mortgage by an additional 10 years, your monthly payments will reduce to £716 per month
- At the end of the 6 month period, if you switch your mortgage term back to the original term, your payments will increase to £1,138 per month
- Assuming your interest rate remains at 6%, at the end of the 6 month term extension, you’ll pay £800 more in additional interest, than if you’d not temporarily extended your mortgage term
The money helper website also offers a mortgage calculator to give you an idea of the monthly payments you’d pay on new mortgages, interest only mortgages and your mortgage if there was an interest rate rise.
If you are concerned about making your next mortgage payment and think this option will help, you can apply by completing our form. Once we’ve received your application we’ll assess your mortgage account to make sure you’re eligible to take this option. You don’t need to contact us, we’ll send a letter to confirm what happens next, including a personalised illustration of the costs.