Is the mortgage market turbulence getting you down? Have you got a mortgage-related question you need answering? Email in, and we will get one of our experts to reply. Nick Mendes, mortgage technical manager at John Charcol, has given his advice to a reader below. If you have a question for our experts, email us at money@theipaper.com.
Question: I had a 2 per cent mortgage rate, which is expiring later this year. My rate will probably go up to around 5 per cent. Currently, I’m on a 25-year mortgage term, which I’ve completed five years of. Should I push it up to 30 years? Would that save me cash?
Answer: Extending your mortgage term can be a sensible way to ease the immediate pressure on your monthly budget. But it is not a decision to make without weighing the longer-term cost.
You fixed at a point when mortgage rates were far lower than they are today, so the increase you are facing may be significant. You will not be alone in that. Many borrowers coming off deals taken out in 2021 are finding that their new payment looks very different.
Extending the term is usually possible when you remortgage, provided you meet the lender’s affordability checks and their rules on the maximum age at the end of the mortgage.
