Extend your mortgage term after a payment holiday
If your payment holiday is coming to an end, you’ll be aware that the amount you pay each month will go up to cover the payments and interest charges you missed while you took a break.
The good news is that if you’re on a repayment mortgage, you could extend the term to keep the amount you pay each month close to what it was before your payment holiday.
Example 1
Before a term extension
|
|
---|---|
Outstanding mortgage balance |
£100,000 |
Remaining mortgage term |
20 years |
Monthly payment before a payment holiday |
£524.93 |
Monthly payment after a payment holiday |
£542.17 |
Total amount you would have paid after a payment holiday |
£130,120.80 |
After a term extension
|
|
---|---|
Outstanding mortgage balance |
£100,000 |
New remaining mortgage term |
20 years 11 months |
New monthly payment |
£533.87 |
New total amount to repay |
£131,614.36 |
Example 2
Before a term extension
|
|
---|---|
Outstanding mortgage balance |
£250,000 |
Remaining mortgage term |
20 years |
Monthly payment before a payment holiday |
£1,312.33 |
Monthly payment after a payment holiday |
£1,355.42 |
Total amount you would have paid after a payment holiday |
£325,300.80 |
After a term extension
|
|
---|---|
Outstanding mortgage balance |
£250,000 |
New remaining mortgage term |
20 years 11 months |
New monthly payment |
£1,310.90 |
New total amount to repay |
£329,035.90 |
The examples above are based on a mortgage interest rate of 2.75%. Please be aware that interest rates could change over the remaining mortgage term and may result in the total amount to repay increasing or decreasing.