My husband and I have a joint mortgage. We will reach the end of a five-year fixed agreement in November 2025.
My husband is 62 and I am 47. We will have eight years left on the mortgage and will owe around £90,000.
Our current monthly payment is £1,180. My husband is likely to retire in December and will have a private pension of £15,000.
He is currently self-employed and earns around £36,000 a year. I will continue working for the foreseeable future. We have a son who will start sixth grade and will probably go to university afterward. My salary is £109,000. I’m contributing to the teachers’ pension plan.
I want to remortgage for a longer term. This is to have more money available monthly until my husband can claim the state pension.
I would like to know how I can do with this. Is it better to remortgage in just my name or are there lenders that would allow us to have a 23 year mortgage (which would be about half the monthly payment), which would take me to 70 and my husband to 84?
There will be enough pension to cover it, but I intend to overpay before then anyway. What do you think we should do? D.R.
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Mortgage help: In our weekly column Navigate the Mortgage Maze, broker David Hollingworth answers your questions
David Hollingworth replies: As your husband approaches retirement and your son approaches college in the not-too-distant future, it makes a lot of sense to consider your overall financial situation.
Your household income will fall just at the point where costs can rise, with the possibility of higher mortgage payments and future studies to back it up.
Your mortgage is clearly an area that will need to be managed as part of that, but it is important to approach it methodically rather than jumping to more extreme measures which could have a knock-on impact.
Take a methodical approach to understand the current situation and help you understand what the options for extending the deadline might be, along with their potential implications.
It looks like you’ve done some of the legwork, although the monthly mortgage payment of £90,000 suggests a rate significantly higher than the low rates available before interest rates started rising in late 2021.
Monthly payments of £90,000 over eight years would be more consistent with a rate of around 6 per cent.
Depending on the lender, you may have recently received your annual mortgage statement. This should give you all the details you need to know, from applicable early repayment fees to current balance, remaining term, and interest rate.
You could have had a higher rate due to your situation at the time, or you may have been overpaying on your mortgage. The latter can give you more flexibility in the monthly cost by allowing you to lock in any additional payments without having to extend the term as much, or even at all.
It sounds like affordability 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.
However, lenders can lend beyond retirement and should also take pension income into account, where this can be demonstrated.
That doesn’t seem likely to limit the options available, but as you identify, extending the term could exceed some lenders’ limits on the maximum age at the end of the mortgage term.
Although some will limit the maximum end-of-term age to around 75, an increasing number will consider lending at age 80 or 85 or even no age maximum at all.
Some lenders may even consider ignoring your husband’s older age if you don’t need to rely on his income to meet affordability requirements.
Therefore, there should be options, and limiting the choice of lender will depend on how far you decide to extend the term.
Most lenders would expect the property and mortgage to be in your name and you should think carefully before attempting to restructure the mortgage solely in your name.
Extending your mortgage term will lower your monthly payment and give you more disposable income, but that also comes with a cost.
Extending the term will significantly increase the total interest payable.
For example, a mortgage with a repayment of £90,000 over 8 years at a rate of, say, 4.50 per cent would cost £1,118.09 per month versus £524 per month over 23 years.
However, the total long-term interest would be £54,624 compared to £17,337.
Finding the best rate will help you understand how long you want to extend your deadline or whether you can avoid it.
The lower you can keep the term the better, but if you want to extend it beyond 20 years you should keep it under review.
Most agreements will allow overpayments, typically up to 10 percent annually, without imposing a penalty.
Therefore, you could pay more if you could, which would help you trim the balance more quickly and reduce the total interest payable overall.
In short, I think it’s best to keep the mortgage in joint names, look at what the new mortgage might cost and whether that will require such a long term extension.
The shorter you can keep it, the better, but be sure to review it periodically and consider overpaying if possible, to mitigate the increase in total interest.
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