My husband and I have a joint mortgage. We are coming to the end of a five-year fixed deal in November 2025.
My husband is 62 and I am 47. We will have eight years left on our mortgage and we will owe around £90,000.
Our current monthly payment is £1,180. My husband is likely to retire in December and will have a £15,000 private pension.
He is currently self-employed earning about £36,000 per year. I will still be working for the foreseeable future. We have a son who will start sixth form and then is likely to go to university. My salary is £109,000. I am paying into the teacher’s pension scheme.
II want to remortgage over a longer term. This is to give us more available money on a monthly basis until my husband can claim the state pension.
I would like to know how I can go about this. Is it better to remortgage in my name alone or are there lenders who would allow us to have a 23 year mortgage (which would roughly half the monthly payment) taking me to 70 and my husband to 84.
There will be sufficient pension to cover it, but I intend to overpay it anyway before then. What do you think we should do? D.R.
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Mortgage help: Our weekly Navigate the Mortgage Maze column sees broker David Hollingworth answering your questions
David Hollingworth replies: As your husband nears retirement and your son edges toward his university studies in the not-too-distant future, it makes complete sense to consider your overall financial situation.
Your household income will fall just at the point that costs may climb, with the potential for higher mortgage payments and future studies to support.
Your mortgage is clearly an area that will need to be managed as part of that but it’s important to approach that methodically rather than leaping to more extreme measures that could have a knock-on impact.
Take a methodical approach to understand the current position and help you understand what the options could be to lengthen the term, along with any implications.
It sounds like you have done some of the groundwork already although the monthly payment on the £90,000 mortgage suggests a rate rather higher than the low rates available before interest rates started to climb at the end of 2021.
The monthly payments of £90,000 over eight years would be more consistent with a rate close to 6 per cent.
Depending on the lender, you may have recently received your annual mortgage statement. This should give all the detail you need to know, from any applicable Early Repayment Charges to the current balance, remaining term and the interest rate.
You could have had a higher rate because of your situation at the time, or you may possibly have been overpaying the mortgage. The latter may give you more flex in the monthly cost by allowing you to peg back any additional payments without having to extend the term by as much, or even at all.
Affordability looks like it should be good based on your income although lenders may want confirmation of income if you intend to retire before the end of the term.
Lenders can lend beyond retirement though and should also take pension income into account as well, where it can be evidenced.
That doesn’t look likely to limit the available options but as you identify, extending the term could push the boundaries for some lender limits on maximum age at the end of the mortgage term.
Although some will limit the maximum age at the end of the term to 75 or so, a growing number will consider lending to 80 or 85 or even apply no maximum to age at all.
Some lenders may even consider ignoring the higher age of your husband if you will not need to rely on his income to meet the affordability requirements.
There should therefore be options, and the limitation of lender choice will depend on how far you decide to extend the term.
Most lenders would expect the property and mortgage to be in the same names and you should think very carefully before attempting to restructure the mortgage into your name only.
Extending the mortgage term will reduce the monthly payment and give you more disposable income but that also carries a cost.
Extending the term will significantly increase the total interest payable.
For example, a £90,000 repayment mortgage over 8 years at a rate of say 4.50 per cent would cost £1118.09 per month versus £524 per month over 23 years.
However, the total interest over the longer term would be £54,624 compared to £17,337.
Finding the best rate will help you to understand how much you may want to extend the term, or if you may be able to avoid it.
The lower you can keep the term the better but if you do want to push it out to more than 20 years you should keep it under review.
Most deals will allow overpayments, typically of up to 10 per cent per annum without hitting you with a penalty.
You could therefore pay off more if you were able, which would help you cut back the balance more quickly and reduce the total interest payable overall.
In summary, I think it best to keep the mortgage in joint names, look at what the new mortgage could cost and whether that will call for such a long extension of the term.
The shorter you can keep it the better but be sure to keep it under regular review and consider overpaying if possible, to mitigate the hike in total interest.
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