# extend the term of a tracker?



## Wonderer (6 Jul 2011)

Hi there 

We have read the other posts on the theme of trackers but can't find anything that deals with our query specifically.

We have a tracker mortgage. one of the terms of the mortgage is that any amouont paid in excess can be later withdrawn without penalty.

we regularly pay lump sums in. We also reduced the term of our mortgage from 35 years to 19 years.

However, we now recognise the value in having a tracker and are considering lengthening the term again. This means that we could have the tracker for longer thus the money we have put in, in excess of the required repayment, could be withdrawn and used towards the purchase of a new house at the tracker rate. 

Do you think this makes sense? any comments or suggestions would be appreciated
W


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## serotoninsid (6 Jul 2011)

Makes sense - but I would imagine you would have serious resistance from your lender to extend the mortgage term once more?


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## LDFerguson (6 Jul 2011)

A lot depends on whether you formally reduced the term of your mortgage to 19 years, i.e. signed a form saying "New Expiry Date May 2030" or whatever, or if you simply increased your monthly repayments, which had the effect of reducing your term.  Although the two have an identical effect, the former is a change to the original contract, so the lender can refuse a change back, while the latter can be stopped at any time.  

Your idea about using the overpayments to fund another house purchase only works assuming that you're keeping the original house as the security.


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## Rasher (6 Jul 2011)

It is possible to do it. I am after extending the term on an investment mortgage from 12 years to 17 years.The mortgage was an interest only tracker which is just after changing to capital and interest payments. Surprisingly, I didnt even look for this option from the bank but they offered it to me.Even though the mortgage is now over 17 years, it will remain on the tracker rate for that term.

Rasher.


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## Wonderer (7 Jul 2011)

LDFerguson said:


> A lot depends on whether you formally reduced the term of your mortgage to 19 years, i.e. signed a form saying "New Expiry Date May 2030" or whatever, or if you simply increased your monthly repayments, which had the effect of reducing your term. Although the two have an identical effect, the former is a change to the original contract, so the lender can refuse a change back, while the latter can be stopped at any time.
> 
> Your idea about using the overpayments to fund another house purchase only works assuming that you're keeping the original house as the security.


 

Thanks a million for the feedback.   Really appreciated.  Just in terms of what you saying we'd need to keep the other house....

If we withdraw the money we are entitled to, lets say 100,000.  Use that to buy a new house.   Borrow whatever extra we need on a new mortgage.  Sell the old house.  If we still owe money on that, then at least it'll still be on a tracker rate and therefore better than borrowing the entirety on a new rate?

Does that make sense??   I just dont have anyone to run these ideas by!!!

Thanks a million!
C


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## 44brendan (7 Jul 2011)

If you are now tied in to a formal contract on the new term this is unlikely to work. No Bank/institution will willingly extend the term of a tracker mortgage as they are losing money on them.
In my view your first task is to contact your Bank. Establish exactly what your current position is and whether there are options available to you. Only then will you be in a position to make an ultimate decision.


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## homeowner (7 Jul 2011)

Wonderer said:


> If we withdraw the money we are entitled to, lets say 100,000. Use that to buy a new house. Borrow whatever extra we need on a new mortgage. Sell the old house. If we still owe money on that, then at least it'll still be on a tracker rate and therefore better than borrowing the entirety on a new rate?
> 
> Does that make sense?? I just dont have anyone to run these ideas by!!!


 
I dont think any bank these days will give you a mortgage while you still have an outstanding mortgage on another property.


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## Wonderer (14 Jul 2011)

*thanks*

That's great guys. thanks for all the advice. Well done, Rasher. Will keep checking this post to see what others think


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## Booter (18 Jul 2011)

Rasher said:


> It is possible to do it. I am after extending the term on an investment mortgage from 12 years to 17 years.The mortgage was an interest only tracker which is just after changing to capital and interest payments. Surprisingly, I didnt even look for this option from the bank but they offered it to me.Even though the mortgage is now over 17 years, it will remain on the tracker rate for that term.
> 
> Rasher.



Which bank was that, Rasher?


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## koscienly (8 Sep 2011)

Is it possible where you may own 2 properties with say 18 years left to pay that the bank will extend the mortgage out to 30 years to assist with the repayments?


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