What happens if you haven't paid your mortgage off by the end of the term?

[Chicchicchicchiclana]

As per thread title.

What is the procedure if you get to the end of your mortgage term and there is still money outstanding?

What does the bank or building society do?

I suppose if you leave it until the last minute they could start their standard repossession process, like they would if you stopped paying mid term.

What interest rate are you paying now and are you in a position to remortgage to a repayment mortgage, over a longer term if necessary?

Do you foresee any extra lump sums coming your way like a pension lump sum that could pay off the mortgage? Or are you in one of the 'mortgage prisoners' situations and if so, are you keeping up with the campaigns to help people in such situations, who may be due compensation?

How much would the 8% of value be? There's a huge difference whether this is £10-20k or a hundred grand or more in what you can do.

I don't expect that they will kick you out the day after your mortgage expires, but if they start the repossession process, this could add charges and affect your credit rating, so you'd want to avoid this route if you can. If you plan to sell the property and are getting on with this they might be happy for the interest only arrangement to continue for a few months while a sale goes through.

how many years beforehand?
With my ex DP it was 2 years. Cold comfort though as the house was repossessed by the bank. They were brutal.

If your mortgage expires on 5th May 2030 the back will expect to receive the money on 5th May 2930.

So if you’re planning on selling up you’ll want to do it well in advance of that date.

Banks do repossess for relatively small sums of money (and of course 8% can still be a large sum of money).

Your best bet is to engage with the bank now. Remortgage so you’re repaying a preferential interest rate which will likely mean the overpayments will go much further.

Sometimes people take out interest only mortgages on investment properties they don’t live in. They are relying on a rise in property value and selling when the mortgage term is up, Hopi g for more than they paid so they can pay back the loan and have some money left over as their profit.

Other people do the same expecting to downsize. It’s the same principle of the increase in value funding the mortgage.

You can either sell to reduce the equity and use it to pay the mortgage off, or you can remortgage which allows the initial lender to be paid off, or you can remortgage with the existing lender.

It depends really whether you have enough equity to buy somewhere else...as you will need to live somewhere. All depends on age, earning potential etc what you do.

Worst outcome is you end up having to sell and not being left with enough after paying mortgage off to buy somewhere and having to rent.

It’s so important to have a clear plan when having endowment or I terst only mortgages.

Goodness, thanks for so many replies! Wasn't expecting that many.

We don't want to remortgage as we'll be in our mid 60s in 8 years time when it expires. We'll still owe approx £70,000. Really my question was about when will we start getting "oy, we want our money back" messages from the Building Society. We have to think about when we're going to downsize and how much by in the next 5 years or so I guess.

We have to think about when we're going to downsize and how much by in the next 5 years or so I guess.

Is there any chance of you downsizing earlier? A smaller house should mean smaller bills which should make things easier for you all round.

Is it the case that you do t want to ask the mortgage lender themselves about this, as you fear it will remind them that you’re there are highlight that you aren’t on track to pay off?

With this amount if time to go, don’t worry about that. Actually knowing what their process and timescales are which will really help you make informed decisions about this. I’d approach them and ask about their procedures and processes.

It’s good you’re trying to plan ahead, as like others say, if you let the mortgage term run out, it can be unpleasant and options available reduce and become less favourable.

Will you need to move to somewhere significantly cheaper and smaller and/or in a very different location? I’m asking if this will bring about a major lifestyle change for you and is it something you’re not looking forward to, or something youvela always expected and factored in. Is the fact it won’t pay off a surprise to you and has taken you by surprise?

I ask those questions, because the answers might mean you could plan to move much sooner if it won’t be too much of a lifestyle change or too traumatic. If it’s all not what you wanted or means big relocation and change of life I can see you want to leave it as long as you can, whilst still ensuring there’s definitely enough time to sell before you get anyone on your back about the mortgage....but quite how close to the end of the mortgage that point is, only the lender can tell you.

Do be aware it can take well over a year to sell. Ensure you leave far longer than you think it might take, to avoid the difficulties of getting too near the end of mortgage.

In terms of when you get the letters it varies bank to bank. Once they do start though they’ll be frequent and designed to invoke pressure.

Even when you’re expected them and have a plan I believe people can find them intrusive and stressful.

Would you still be able to afford interest only payments on your outstanding mortgage when you retire? Consider rates going up 2 or 3% - would you be able to afford the interest? If you do, you might be able to get a retirement interest only mortgage.