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Original poster

what happens when a mortgage ends?

62 replies

KatherineKrupnik · 30/01/2013 14:20

Our mortgage was a 2 year mortgage that finishes in a couple of months. What happens?! Do we arrange a new mortgage to carry on seamlessly or are we expected to pay off what we owe in a lump sum...? (surely not) Presumably we will have to be assessed all over again, can't remember how long the process took last time, but how long should we allow for that so that we do have something in place?

Thanks in advance.

OP posts:
nipersvest · 30/01/2013 14:22

once your current deal ends you just go automatically on to the svr (standard variable rate) offered by your mortgage company. you might want to check the % of interest rate against what you are on now to see how much your payments will change. you don't need to apply or be assessed for this to happen. you can get in touch with your lender and see what other deals they have to offer if you wanted.

Original poster
KatherineKrupnik · 30/01/2013 14:23

No - our mortgage ends. It was a 2 year mortgage, not a 2 year mortgage rate. We have to re-mortgage.

OP posts:
DoItToJulia · 30/01/2013 14:24

Watching with interest!

upinthehills · 30/01/2013 14:26

Unless you have paid off the mortgage in the 2 years - so the duration was 2 years, I would expect your lender to transfer you on to the svr. If you want to seamlessly move to a new mortgage product or lender you will need to sign up to a new package in advance of the product end date.

Charmingbaker · 30/01/2013 14:27

Firstly you need to know what kind of mortgage you have - repayment, interest only or endowment, as what happens next will depend on that.

Original poster
KatherineKrupnik · 30/01/2013 14:29

Interest only mortgage. The duration of the mortgage was 2 years.

OP posts:
nipersvest · 30/01/2013 14:30

ah, sorry i misread the op then!

but i would have thought if there was still debt remaining, then yes, you'd need a new mortgage or to clear the debt by some other means.

frasersmummy · 30/01/2013 14:31

well if the mortgage has ended then the house belongs to you and the bank should give you your title deeds to the property which they will have been holding while it was mortgaged.

Charmingbaker · 30/01/2013 14:34

You need to contact the lender ASAP and find out from them what will happen. It is likely they will transfer you onto their SVR, if so you need to find out what that rate is and how it will affect your current payments. You then have to decide wether to continue with your current lender or find another mortgage deal.

Original poster
KatherineKrupnik · 30/01/2013 14:35

I wish, frasermummy, think they will hold onto them until I can put £70k into their hands!

So will our new mortgage lenders transfer the amount directly to our old mortgage lenders??

Am bemused by it all!

OP posts:
Original poster
KatherineKrupnik · 30/01/2013 14:36

x post. Thanks charmingbaker

OP posts:
frasersmummy · 30/01/2013 14:37

sorry didnt read your post properly .. i'm not usually guilty of that..

Its all really bewlidering isnt it.. really helpful not.. sorry

Viviennemary · 30/01/2013 14:38

I'm not quite sure exactly what you mean. If your particular mortgage deal ends you carry on and pay the variable rate set by that building society or bank. . But if you're mortgage ends that means you've paid off what you owe. I'm a bit confused with your post.

CunfuddledAlways · 30/01/2013 14:38

sorry i dont really understand? do you still owe money??

Viviennemary · 30/01/2013 14:39

Sorry I understand now. Interest only. In that case I'm not sure. I apologise!

Original poster
KatherineKrupnik · 30/01/2013 14:43

I probably don't know exactly what I mean either, sorry for confusion.

I thought the mortgage ENDS, it was a 2 year mortgage, not a 25 year mortgage. We pay interest only. But does it only END when you pay the money off? I thought they lent you the money for a set time & at the end of it you had to pay it off... or remortgage, surely?

OP posts:
Original poster
KatherineKrupnik · 30/01/2013 14:44

sorry - I don't think the mortgage ends, it does definitely end.

OP posts:
yellowsnownoteatwillyou · 30/01/2013 14:44

If you have an interest only mortgage and the term of the mortgage is now finished, you will either need a repayment vehicle to clear the amount, or you will need to remortgage with another company or the same and start a new mortgage term.

Alibabaandthe40nappies · 30/01/2013 14:47

You will need to either pay off the balance, or get another mortgage.

Why did you only take it out over two years if you knew you wouldn't have paid it off?

Original poster
KatherineKrupnik · 30/01/2013 14:49

Because one of the mortgage holders retired in 2 years so they wouldn't give it for longer, but got better rates than doing it another way. We explored lots of options!

OP posts:
piprabbit · 30/01/2013 14:52

Sounds like you need to call your mortgage provide to clarify what they think is going to happen.

I'm very surprised that anyone would lend you £70k for 2 years without wanting to have some sort of plan as to how you are going to pay off the capital as well as the interest. Were they expecting the mortgage to be pais off using some sort of lump sum on retirement?

fabulousathome · 30/01/2013 14:53

So do you have the 70K to pay it off or do you need to get another mortgage?

You will need to have your property valued again I would assume.

Alibabaandthe40nappies · 30/01/2013 14:55

Right - so have you paid it off?

Alibabaandthe40nappies · 30/01/2013 14:56

OP - do you realise that if you cannot either pay it all back or get another mortgage that your current lender will simply repossess your house?

You sound incredibly naive.

nipersvest · 30/01/2013 14:58

my fil had a similar arrangement, he was 7 years off retirement, so could only get a 7 year mortgage. but his was an endowment one as he had to have a way of clearing the debt otherwise they wouldn't lend the money.

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