The average mortgage runs for 25 years, however this term can be longer or shorter, according to the Money Advice Service. There are a number of types of mortgages available. This includes a repayment mortgage, interest-only mortgages, and a combination of the two. These options affect whether and how the capital and interest is repaid. Mortgages come with fixed or variable interest rates. The former is where the repayment rates are fixed, regardless of what interest rates are doing in the wider market.
The term mortgage free is used to describe a person or number of people who had a mortgage and have paid all the mortgage payments in full and now own the property, and own the legal deeds to the property.
It may be possible to overpay on one’s mortgage.
This means that the amount required to be paid in the future may reduce, meaning it can shorten a mortgage term.
It could be worth taking some time to seriously consider whether or not this option is suitable for one’s personal circumstances.
The Money Advice Service offers a guide which asks questions which may help a mortgage-holder to think about what’s right for them.
Money.co.uk points out that there may be a limit on how much a mortgage-holder can overpay each year.
“Most mortgages set a limit on how much you can overpay a year, especially on fixed, tracker and discount deals,” the website states.
“This is usually 10 per cent of your remaining balance, but some deals are stricter and some are more flexible.
“If you go over this limit, your lender might make you pay an early repayment charge (ERC), which can also apply if you pay off your mortgage early.
“Before you make any overpayments, find out the limits and fees by asking your lender, checking your paperwork or looking online.”
Speaking at a parliamentary reception event, he explained that he had switched mortgages via online mortgage broker Tussle.
Mr Reynolds described the volume of people falling on Standard Variable Rate mortgages as a “genuine issue”.
He also called on the financial sector to “work better to serve our people”.
According to the Financial Conduct Authority (FCA) report “Mortgages Market Study”, an estimated 800,000 consumers (10 per cent of mortgage holders) do not switch mortgages when they would benefit from doing so.