Mortgage Party Thread

When renewing your mortgage is there any benefit in reducing your terms?

That is as opposed to increasing your DD to the same value as the reduced terms (obviously not invoking any overpayment penalties). You would keep some flexibility this way if you hit any financial difficulties etc.

Feels like I might be missing something…

I reduce it each time, then try and make overpayments where I can also.

If you’ve had a pay rise in the last X years (however long your previous mortgage was), you might have more money that you can afford to pay off, which means that over the full length, you’d be paying less to the bank overall.

I plan to do that when our re-mortgaging comes around (partly because I’m currently past retirement age at our current end of term, and I had to sign a waiver saying that I intend to work past 65)

Is there any benefit in reduction vs overpayment though?

pretty much the same thing tbh

Yeah I can pay more but overpaying seems better than reducing the term (amounts to the same thing) in case you get in the shit… Unless I’m missing something.

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Ah yes that’s what I’m looking for thanks. I wasn’t missing anything.

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Good party guys.

I’ve decided to reduce my stay at the mortgage party by 3 years

I was going to lop six years off the party but won’t bother now.

this is what i’m planning on doing as i’m in the highly exciting process of getting a new mortgage with a better rate. apparently will pay £500 less per month which is crazy to me as the idea of having an extra £500 just to do whatever with amazes me, so i’ll probably just overpay by whatever doesn’t get me any penalties and keep it flexible.

That is exactly how to party!

maybe i should just have a party each month with a budget of £500 instead

it could be a sensible financial advice party maybe

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Unfortunately I was a fool and booked a call with the Nationwide (when I thought I might reduce the term) rather than just doing this online so I will now have someone aggressively attempting to sell me various additional insurance packages for 90 minute on Friday.

Literally just been making calls about ours this morning. We get mortgage broker to do it. Pay them £300 and they do all of the legwork (and hopefully save us more than £300 over the course of the mortgage). Worth the money IMO.

Can’t you just do it online anyway, then rock up to the meeting, put your feet up and tell 'em you’re already sorted?

Yeah maybe, although I would probably just cancel the call then… Will look into it.

A cautionary tale: a few years back I wanted to overpay my mortgage by a couple of hundred every month as I was in a good place financially. The mortgage company (Santander) convinced me that I should instead reduce the term - after all it was free and took seconds to do so why not? Fast forward six months and I was made redundant - tried to reverse it back to the original term and they basically told me I’d have to go through a full mortgage application process and there would be a £700 charge. Fuckers.

Yeah this was my thinking. Not only do you have a cheaper mortgage if you get in the shit you can then use your overpayments to pay your mortgage for a while.