Branches & agencies
Extending your mortgage term
If your payments are up to date, you can extend the term of your mortgage. This will reduce your monthly payments because you’ll be spreading them over a longer period.
There won’t be a new affordability check (to examine your income and outgoings), and your credit score won’t be affected. And within six months of switching to a longer term, you can switch back to your original term if you want to.
It is important to know that taking longer to repay your mortgage will increase the total amount of interest that you will pay. If you can afford to pay your mortgage payments now, you should think very carefully before making changes, as they will cost you more in the longer term.
Who can extend their mortgage?
You can extend your mortgage term if all of the following apply to you:
- You are up to date with your mortgage payments, and do not have any arrears.
- You have a residential mortgage (it is not available for a buy-to-let mortgage).
- You don’t already have an interest-only mortgage.
- Your new mortgage term will still finish before your expected retirement age.
How would extending the term affect my payments?
Before you decide to change the term of your mortgage, we will let you know how much your new payments will be and how much extra interest you would pay over the new term. The following example shows how the payments would change for a current mortgage balance of £100,000.
• The example assumes an interest rate of 6%, and that it remains the same.
• It assumes that the remaining mortgage term is 10 years.
• It assumes that you’re extending the remaining term to 15 years.
In this example, this is how the payments would change:
• The original monthly repayment is £1,100.
• The new monthly repayment would be £844.
• Additional interest paid over the new longer term would be £18,695.
As you can see, extending your mortgage term can help you by reducing your monthly payments, but you would pay more interest during the new longer term.
Within six months of switching to a longer term, you can switch back to your original term if you want to. It is important to know that the new monthly payments will be different to the original monthly payments. This is because they will be calculated on the new total outstanding balance, which will have changed since you started the arrangement.
Repayment calculator
You can use our repayment calculator to see how your payments will change if you increase your mortgage term. You’ll need to have the following information to hand:
- The current interest rate of your mortgage.
- Your remaining mortgage balance – you can find this by logging onto H&R Online (if you are registered) or from your last annual mortgage statement.
- The remaining term of your mortgage.
You can input this into the calculator and then update the term to see how your payments would change if you extended your mortgage term.
What if I change my mind after I have extended my mortgage term?
If you change your mind within six months, you can change back to the original term (from 15 more years back to 10 more years, for example).
Changing back to the original term will mean making higher monthly payments, but you will pay less interest in the long-term because the term will be shorter again.
It is important to know that the new monthly payments will be different to the original monthly payments. This is because they will be calculated on the new total outstanding balance, which will have changed since you started the arrangement.
To change back, you will just need to contact us on 01455 894730, Monday to Friday, 9am to 5pm – or by email at mortgagesupport@hrbs.co.uk.
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