Reducing the term of the loan

I will soon be in a position to pay more towards my mortgage. To avoid paying so much in interest and to build up some more equity, I wish to reduce the term of my loan.

How should I approach this with my bank? Is it as simple as just calling them and instructing them that this is what I want to do, or are there terms and conditions that I need to be aware of? Also, will this have any negative consequences for my mortgage broker's commission from the bank?

I am still in the first year of my mortgage and it's a 35 year term. I'm coming to the end of my period of a fixed interest rate.

Thanks.

Are you looking at putting regular lump sum payments into your mortgage or increasing the monthly repayments to reduce the term? Increasing mortgage repayments can significantly reduce the term and interest payable on your mortgage.

Have you decided what rate you are going to go on when your fixed rate is up? Depending on the lender you may or may not be penalised for adding lump sum payments to fixed rates if you decide to go for another fixed rate. You will need to check with your lender directly to see if yours allow it while variable/tracker rates are more flexible.
Your lender should write to you when your fixed rate is up outlining your options. It is then just a matter of choosing the right rate for your own personal circumstances.

Karl Jeacle's mortgage calculator may be of some use to you for your calculations.

I am looking to increase my mortgage repayments to acheive this. I don't have a lump sum to put towards it at this stage.

When my fixed rate is up in December, I'm leaning towards a variable rate for 2 reasons.

1. It is more flexible as regards to avoiding penalties if I wish to contribute lump sums and/or change the term again
2. It's widely supposed that we are at or are nearing the end of Interest Rate hikes (despite what Alan Greenspan mentioned about double digit interest rates in the years ahead).

Yes, the mortgage calculator certainly puts interest payments into perspective!