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Changing mortgage term

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  • 07-10-2009 11:41pm
    #1
    ParkRunner
    Registered Users Posts: 3,026 ✭✭✭


    Hello,
    I just have a query about changing the term of a mortgage. I don't have a mortgage yet but am planning to take one out for 30 years and fix for 5 years. Is it possible after 5 years to then reduce the term over which you repay the mortgage without penalty or what would be the case?

    Given the way the economy is at the moment I wouldnt be confident enough to go for a 25 year mortgage just yet but in a few years when things have stabilised and maybe improved I should be able to make larger repayments to reduce the term and was wondering if this generally incurs a cost.

    Thanks


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    #2
    cmsp.plumber
    Closed Accounts Posts: 50 ✭✭cmsp.plumber


    Im with ICS and i took 3 yrs off my last yr when i was only 2yrs ito the mortgage..... dunno if it differs with each bank/building society


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    #3
    ParkRunner
    Registered Users Posts: 3,026 ✭✭✭ParkRunner


    I am planning to go with Haven/EBS anyway for what it's worth


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    #4
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    Once your fixed term ends, you're automatically moved onto a variable rate, at which point you can alter the term of your mortgage without penalty.


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    #5
    nouveau_4.0
    Closed Accounts Posts: 162 ✭✭nouveau_4.0


    Just on a related note, is it easy to increase the length of your mortgage if you are on a variable rate, or would the banks be against this?


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    #6
    ZYX
    Registered Users Posts: 882 ✭✭✭ZYX


    nouveau_4.0 wrote: »
    Just on a related note, is it easy to increase the length of your mortgage if you are on a variable rate, or would the banks be against this?

    It is much harder to do this. That is why (despite what people on this forum say) EF is making a good decision. Get the longest term you can then pay off extra each month if you want to reduce term of loan.


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    #7
    ParkRunner
    Registered Users Posts: 3,026 ✭✭✭ParkRunner


    ZYX wrote: »
    It is much harder to do this. That is why (despite what people on this forum say) EF is making a good decision. Get the longest term you can then pay off extra each month if you want to reduce term of loan.

    Just out of interest in what way is it more difficult to extend the term rather than reduce it?


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    #8
    Eurorunner
    Closed Accounts Posts: 2,393 ✭✭✭Eurorunner


    seamus wrote: »
    Once your fixed term ends, you're automatically moved onto a variable rate, at which point you can alter the term of your mortgage without penalty.

    Its a shame it wasnt more flexible to extend or shorten. There would be a good opportunity to max out the TRS by shortening to whatever was bearable and lengthening again after the 7 years if necessary.


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    #9
    ZYX
    Registered Users Posts: 882 ✭✭✭ZYX


    EF wrote: »
    Just out of interest in what way is it more difficult to extend the term rather than reduce it?

    Well first of all you have to ask bank to extend which they do not have to do. If you are in negative equity you can assume they will not extend it (unless you can show exceptional circumstances. If they say yes then it will obviously be on their terms. So if for example, if you had a tracker mortgage then that will be gone. They can charge fees for changing.


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    #10
    Emma1980
    Closed Accounts Posts: 177 ✭✭Emma1980


    does anyone know if it's possible to change from a 2 year fixed to a 5 year fixed and if there is a penalty involved in it other than the monthly repayments being higher?


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    #11
    Denisejcc
    Registered Users Posts: 1,060 ✭✭✭Denisejcc


    Emma1980 wrote: »
    does anyone know if it's possible to change from a 2 year fixed to a 5 year fixed and if there is a penalty involved in it other than the monthly repayments being higher?

    You cant make any changes to your mortgage during the fixed term without hefty penalties. When your 2 year fixed expires you can then choose to go onto a 5 year fixed.


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    #12
    Emma1980
    Closed Accounts Posts: 177 ✭✭Emma1980


    i thought maybe it was just if you tried to get out of a fixed term altogether where you would be fined.
    a crap, i'm worried like many others about what the interest rates will be when the 2 year term expires!


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    #13
    Denisejcc
    Registered Users Posts: 1,060 ✭✭✭Denisejcc


    Emma1980 wrote: »
    i thought maybe it was just if you tried to get out of a fixed term altogether where you would be fined.
    a crap, i'm worried like many others about what the interest rates will be when the 2 year term expires!

    Check your loan offer as you may be one of the lucky ones that will roll onto a tracker rate when your fixed rate expires... this still happens believe it or not! You should have a copy of loan offer but your bank and solicitor will also have a copy. You never know...


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    #14
    Emma1980
    Closed Accounts Posts: 177 ✭✭Emma1980


    i was never on a tracker mortgage to begin with, only bought my house last november, we were meant to get a tracker mortgage but had just missed out on it :(


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