Renewing mortgage for less than 5 years

[ShipwreckSunset]

Our fixed term will be up next year and I’m wondering if we will be able to get a new deal with a term of less than 5 years? Existing mortgage has longer to run in total but we overpay and would like to clear sooner. Seems like most mortgages have a min term of 5 years though. What do people do when they get to the last 5 years though, revert to more costly SVR?

Shop til your eyes drop or use a mortgage broker directly would be my advice. Have you overpaid on the annual maximum? Are you redemption free?

Fix for five years and overpay as much as possible. What else can you do? There’s only one way interest rates are going to go now.

We are currently overpaying max 10% per year and have a bit put aside to lop off a chunk as well. Have been fortunate that our earnings have gone up quite a bit over last 5 years plus no longer paying childcare. I haven’t looked at what redemption charges would be if repaid early, but assume that will change anyway if we take out new mortgage.

I’m just wondering what most people do when they get to last couple of years on mortgage if can’t renew for less than 5 years, ie stay on current deal at SVR or move to 5 year fix and pay redemption fee if pay off in say 2-3 years?

I've always had the option of 1, 2, 3 or 5 year fixes every time we've changed product - Barclays. You can also overpay by 4 x your monthly contracted payment every month without triggering an early repayment penalty

We fixed for 1 year about 7 months ago, and with the regular overpayment will have about £150 left to pay at the end of the year

@Svalberg I think I’d ideally like to fix for 2 years and overpay, but I have read min term needs to be 5 years. The Barclays overpayment on a fixed rate looks much much higher than Santander, thanks for highlighting!

There's tons of two year fixed rate options around. Every time I have renewed with RBS, I've been offered a 2 year or 5 year fixed rate.

Watch the arrangement fees. A fee free tracker or even the standard variable rate may be cheaper than a fix on smaller mortgages. Do a total cost calculation, including early repayment fees, for the term you expect.

OP I would seriously approach an independent broker to source the best deal for you. It might cost a bit but save you a fortune in the long run.
Also there's Martin Lewis' website.
I hate seeing people getting ripped by wrong advice from banks. They say they're impartial bit I'm not entirely convinced. From bitter experience.

Definitely agree with the broker suggestions. WRT what people do in your situation, you would probably want to work out which option is cheapest in your specific circumstances? There might also be the possibility of overpaying maximums and then keeping the mortgage for the full 5 years but paying a really small monthly amount.

We're in a similar situation but only have 2 years left. I can fix with my current lender for no arrangement fee but it limits the amount of overpayments so can't see how it makes sense to do that at the moment. But the SVR is a worry.

@SwedishEdith

We're in a similar situation but only have 2 years left. I can fix with my current lender for no arrangement fee but it limits the amount of overpayments so can't see how it makes sense to do that at the moment. But the SVR is a worry.

A friend has just remortgaged with 4 years to go into a 5 year discounted variable rate without over payment penalties, so will aim to pay in 2-3 years but at a lower interest rate than SVR. Could be an option @SwedishEdith

You are mixing up two things. The minimum term for a mortgage is 5 years. Within the term of a mortgage you can fix your interest for different periods of time, pretty much all options are available. Bear in mind when you come to the end of a fixed period and your mortgage term left is fewer than five years, you might not be able to change lender as you cannot get a mortgage for less than five years.

Thanks @ShipwreckSunset. Just doubt I'd be able to switch to a new lender with no arrangement fee for such a short period/low amount left to pay.