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Can I Extend My Mortgage Term?

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Yes, sure!  Clients usually extend their mortgage term for two main reasons, the first is to reduce their monthly payments, the second is if their interest-only mortgage is ending soon.  Luckily, we can help with either. 

All mortgage lenders will have different criteria when it comes to maximum age so it’s always best to do this with a mortgage broker like us, on your side.  Here, we have a full range of later life lending mortgage products available also.  

If you are wanting to extend the term of a buy to let, our buy to let remortgages guide will be more helpful to you.  

Top 9 Reasons why to Extend your Mortgage Term 

Extending the term of your mortgage will lower your monthly repayments, clients do this for various reasons, here are the top 9: 

  1. Borrowing more money – If you are looking to borrow more money on your mortgage, extending your term will help keep your repayments down. 
  1. Interest-only mortgage deal ending – If your interest-only mortgage deal is ending soon and you do not have the ability to repay it, we have a full range of age 50+ mortgage products available for you to consider for your personal situation.     
  1. Increased rates – Since you took out your original mortgage, if interest rates have increased significantly, you may want to look at remortgage to extend your mortgage term in order keep your monthly payment to a minimum.  
  1. Having a baby – Reducing the cost of your mortgage will help when you a lower income due to maternity pay and the money saved may allow you to take more time off with your baby or pay towards pre-school nursery fees if required.   
  1. Repayment plan already in place – If you know that you will be receiving a lump sum payment or a gift/inheritance from family and friends in the future, you might want to keep your outgoings as low as possible. 
  1. Paying off other debts – If you have higher interest credit cards and personal loans that you’re looking to reduce, you might want to reduce your mortgage payments for a few years whilst you get these paid off.  More about this can be found here debt consolidation mortgage.   
  1. Investment opportunities – Maybe you’re looking at saving or investing in a buy to let property and would like to reduce your mortgage payments to go towards this.   
  1. Moving home – Over the next 2-5 years you might want to look at moving house and would like to save up towards the fees or renovations so you’re looking to keep your costs down.  
  1. Retirement – Maybe you are approaching retirement and are concerned about a drop in income.  Other types of products maybe more suitable here, read more about your mortgage options for over 60’s here.   

The 4 Risks of Extending your Mortgage Term: 

Typically, when extending your mortgage term to reduce your monthly outgoings there are various factors to consider:  

  1. Paying more interest – When increasing your term, you’ll likely be paying more interest back over the lifetime of your mortgage.  However, lender criteria permitting, you’ll still be able to make regular overpayments to keep this to a minimum.   
  1. Slower equity builds up – With a longer mortgage term, more of your monthly payment will be interest and less capital.  Therefore, by doing a remortgage to extend your mortgage term, it’ll take longer for equity to build up in your home.  It’ll take you more years to own your house outright.  
  1. Higher interest rates – Due to the slower build-up of equity in your home, you may not be able to qualify for the better interest rate remortgages in the future.  As a rule, the better remortgage deals can be accessed by clients that have more equity in their homes.   
  1. Financial commitment – By extending your mortgage term, you’ll be committing to a debt, in the form of a mortgage, for a longer period.  If your goal is to become ‘mortgage free’ by a certain age or as young as possible a remortgage to extend your mortgage term may not align. 

Alternatives to Extending your Mortgage Term 

  1. Cutting back – Going through your current income and expenditure will help you realise where your income is going per month.  Doing this and cutting back on costs such as takeaways, coffees and subscriptions might save you a lot of money in overpayment of interest over the term of your mortgage. 
  1. Unsecured credit – If you are looking to remortgage for home improvements, your mortgage advisor will recommend that you consider unsecured credit options.  Funding your home improvements via a personal loan or credit card could save you lots of interest in the long term and doesn’t put your house at risk or repossession.  
  1. Approaching Retirement – There are lots of options for our later life clients who are looking to extend their mortgage term.  Depending on why you are looking to remortgage and/or extend the term of your mortgage your options can include a new range of later life lending products.  Examples of these include retirement interest only mortgages, term interest only mortgages and lifetime mortgages including equity release advice.  You can learn more about mortgage options for the over 60’s here.  
  1. Moving to a smaller property – If your monthly mortgage payment is too high and you are considering a remortgage to extend the term, you might want to consider downsizing.  Doing this could save you a lot of money over the term of your mortgage in interest payments.  
  1. Moving to a better deal – As part of your free, no-obligation consultation our mortgage brokers will ensure that you’re on the best deal for you and your situation.  Switching to a better deal could help you maintain your current mortgage term.  

Frequently Asked Questions on Extending My Mortgage Term  

Why seek advice for a remortgage to extend my mortgage term? 

There are lots of options available when doing a remortgage and without a reputable mortgage broker on your side matching you to the best product, mistakes can be costly.

What product or lender we’ll recommend will depend on lots of different factors including your age, your future, income and your credit history.  

Please get in touch to speak with one of our mortgage brokers today to explore your remortgage options.  It’s a free, no-obligation remortgage consultation that’ll take about 20 minutes of your time and we’ll answer all your questions and recommend the best way forward.  

Can I remortgage to extend my term if I’m borrowing more money? 

Yes, it may still be possible for you to extend your term if you’re looking to borrow additional funds or remortgage to release equity

In reality, you can likely do this with any remortgage path you’re looking to take, with popular choices also being during a remortgage for home improvements and a remortgage for debt consolidation
Once again though, whilst you will be extending your term over a longer period to lower monthly mortgage repayments, you’ll be paying more interest overall. 

You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments. 

Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally. 

When wouldn’t I be able to remortgage and extend my term? 

Though it varies between the different mortgage lenders, there are a variety of factors that may limit your ability to remortgage and extend your term. These include, but are not limited to, your age, the type of mortgage you have and if you have any mortgage payment debts. 

It’s not the end of the road if this doesn’t work for you, as there may still be options for you out there to help lower your monthly payments. It’s the job of your dedicated mortgage advisor to review your case and look for the most suitable outcome to help you both personally and financially. 

For our older clients, we have a full range of later life lending mortgage products available also.  These include mortgages into retirement, equity release mortgages and lifetime mortgages.   

Can I remortgage to extend the term of my interest-only mortgage? 

We can help with this; this is one of our most popular later life enquiries.  We can offer our clients the full range of retirement and lifetime mortgages including equity release to find a solution.

We’ll also consider any options that are available with your current mortgage lender and regular alternatives.  Which product will be recommended will depend on your income, age and plans for the property. You might want to involve your family members in this conversation. 

What if I want to reduce my term instead? 

Not all clients want to extend their mortgage term, you may also wish to reduce your term instead, which again can apply to almost all mortgage situations.

In this circumstance, contrary to extending your term, you would be paying back less overall, but likely have much bigger monthly mortgage payments to make. Whether we can do this will depend on your affordability and whether you meet the mortgage lenders criteria.

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About the Author

Malcolm Davidson

Managing Director of UK Moneyman LTD

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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Registered Address: 10 Consort Court, Hull, HU9 1PU.

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