Another mortgage one - extend term or not

[Fourmagpies]

I'm interested to hear what others think as I'm swaying between do I or don't I!
Single parent of teens, 13 and 16. House worth approx £450k, mortgage currently £45k. 3 years left on fixed rate (2.75%ish), then variable for 3ish years (overpaid for a couple of years prior to divorce).
I need to transfer the mortgage to just me following divorce (don't need to borrow more, finances all settled). Mortgage provider will port current deal to me but have said I could extend the repayment term to 15 years (I'm currently 50).
DC both have ISAs with enough to support them through uni on top of loans so I won't need to finance them. I can afford the mortgage as it is but it doesn't leave anything for savings. I do have enough savings though to cover at least 6 months of bills if needed. Plan is to sell and buy somewhere smaller when the DC leave home. Current house is large 4 bed, it's too big for just me and the dog but who knows when kids will actually leave!!
Do I suck it up and pay the higher amount and get the mortgage paid and enjoy the satisfaction of it being paid off?
Or do I give myself a bit more of a financial cushion each month, pay a lower amount and enjoy being mortgage free when I finally downsize?
Or third option could be to extend the term but overpay when I can. I'm self-employed so earnings can fluctuate though tend to be fairly stable.

With only £45k left I wouldnt be looking at extending the loan. It appears that everyone is financially stable so id leave the mortgage as is and then sell up and move to a smaller property when youre ready.

Wow, that's very generous of your mortgage company! All options sound pretty comfortable (I'd go with 3 myself) but either way I'd bite their hand off before they change their mind!

You don’t mention the rate you’d be charged will or differ?

Try a mortgage calculator and see the total difference and make a decision based on fact.

I'd leave it as it is. You can pay it off more quickly and with less interest. You are unlikely to need any more savings in the next 6 months so you don't need to save anymore. Better to use the spare money to pay down the debt.

I meant generous to keep your low rate obviously- not the offer to extend the term.

OP said 'Mortgage provider will port current deal to me' 👌

In some ways you're better to take the 15 years, as you don't actually need to pay it off as you'll be downsizing which will clear it anyway. It would be nice to live more now and life is short.

If they will keep the rate the same I would overpay every month but feel comfortable knowing I had a safety net.

I don't think I would extend to 25 though - maybe 10?

Does also depend the rules on overpayment as the common 10% wouldn't be very much with that balance left.

I would extend the term but put difference between old and new payments in a cash ISA with the highest interest I could find. The money is then there if you need it but hopefully you should accrue a lump to pay off the capital when you come to remortgage.

OP said 'Mortgage provider will port current deal to me'

Yes for 3 years then 3 years variable

It does not say what the rat is for any extension.

I can’t see OP getting 2.75% long term.

I can read you know so less of the emojis!

Tough calculation

15 yeas will cost you £20,000
10 year will be £10,000 extra

the difference is about £120 a month breathing space - if this was in a low interest savings account you would be losing more money.

I would do option three, and overpay when it’s comfortable. On our mortgage, we can borrow back the overpayment so it’s sort of like savings.

No need to be snippy. I thought it was obvious that the fixed rate wouldn't be extended. I mean why would it? It's still pretty impressive they're porting it and allowing OP to keep it for three years- that's very much not a given.

It would be at the standard variable rate unless I remortgaged again after fixed rate finishes but I don't think it'd be worth remortgaging again with such a small mortgage.

That was reply to @Scarletttulips .

This was my initial thought, especially as now is a good time to spend more time doing things with DC.

@Fourmagpies you won't have to remortgage to get a deal rate at the end of your fixed term. You will likely be able to do a product transfer with your existing lender. You can always extend to 10 years or 9 or any number up to the 15 years offered.

Thanks all. Some things to think about. I'm hoping once the kids finish school, my bills will go down so that'll make things easier. If they're not at uni, they'll hopefully have a job and can contribute.

Thanks, I didn't realise that, that's good to know. I think I'd like to get it paid off.

Continue as you are as the interest you'll pay to extend the term will be huge.
Better to pay off to continue to pay off monthly for the next few years and then diligently invest after the mortgage is concluded.