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Summary
Can I reduce my mortgage term when remortgaging?
Who it’s for
UK mortgage holders approaching a remortgage who want to balance lowering monthly payments versus shortening the mortgage term (including overpayment and product-transfer options).
What you do
Independent remortgage broker service: model payment-vs-term outcomes across 130+ lenders (25,000+ products), factoring fees, ERCs, SVR risk and future rate scenarios.
How it works
Share your current deal and goals → soft-search MIP in 15 minutes (no credit impact) → we compare like-for-like rate switch, remortgage, reduce-term, reduce-payment and overpayment strategies → a CeMAP-qualified adviser manages everything to offer.
Why trust you
Remortgage Experts, FCA-regulated; CeMAP qualified; thousands of verified 5★ reviews; fast, friendly and trusted process.
Next Step:
Book a free appointment, get your MIP, or request a quick callback.
Is it better to reduce the mortgage term or payments?
This is something that we deal with very frequently. Whether it’s better to reduce the mortgage term or reduce the mortgage payments is very much subject to your personal circumstances and what you’re looking for out of your mortgage.
If you reduce your mortgage term, you are reducing the interest you’re going to be paying on your mortgage. So if it’s a priority for you to get your mortgage cleared quickly and reduce that interest, you might take advantage of a drop in interest rate to make the mortgage term shorter by a couple of years.
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Overpay vs Reduce Term: Example Comparison
| Scenario | Monthly payment (£) | Time to repay (£) | Total interest (£) | Interest saved vs baseline (£) |
| Baseline (no extra) | 1461.48 | 25y 0m | 188442.53 | 0 |
| A) Overpay £200/m | 1661.48 | 19y 10m | 144010.67 | 44431.86 |
| B) Reduce term (same £) | 1661.48 | 19y 9m | 144010.25 | 44432.29 |
Both cut interest and finish the loan sooner.
- Overpaying keeps your official term the same but you pay extra when you can, so it’s flexible.
- Reducing the term formally shortens the mortgage so your required monthly payment is higher. A more disciplined approach and usually saves a touch more if you keep up the higher payment.
Most people choose the option that matches their cash flow and emergency fund.
Lower Rate, Same Payment, £126K Saved!
Initial enquiry
The client was referred to us by one of our previous clients, always the best kind of introduction. Their current mortgage rate was coming to an end, and they wanted to avoid moving onto their existing lender’s much higher standard variable rate of 8.74%. They also mentioned that their mortgage balance didn’t seem to be reducing as quickly as they’d hoped, so they wanted to explore ways to bring the term down while keeping payments affordable.
| Commitment Type | Property Value | Balance | Loan to Value | Term | Payment Type | Interest Rate | Product Type | Payment |
| Current Mortgage | £265,000 | £215,000 | 81.13% | 33 years | Repayment | 5.90% | Fixed | £1,233 |
| Commitment Type | Property Value | Balance | Loan to Value | Term | Payment Type | Interest Rate | Product Type | Payment |
| New Mortgage | £265,000 | £215,000 | 81.13% | 23 years | Repayment | 4.54% | Fixed | £1,252 |
The Challenge
The main challenge was to find a new mortgage product that would both secure a better interest rate and give the client more control over how quickly they could pay off their mortgage. The client’s goal was to reduce the overall term without significantly increasing their monthly repayments, a delicate balance between saving money long term and keeping monthly costs manageable.
The Solution
After reviewing the client’s situation and objectives, we sourced a like-for-like remortgage with a competitive fixed rate. By restructuring the term, we were able to reduce it by 10 years while keeping the monthly payment almost identical to what they were already paying.
This gave the client peace of mind knowing they had a stable rate, a shorter mortgage term, and a plan that aligned with their long-term financial goals.
The Result
The new mortgage maintained monthly payments around the same level as before, yet shortened the term by a full decade. Over the life of the loan, this will save the client approximately £126,000 in interest, a significant financial win without any strain on affordability.
How did this help?
This remortgage gave the client confidence and control over their financial future. They secured a much better rate, avoided the jump to an expensive SVR, and set themselves up to be mortgage-free 10 years earlier than originally planned, all while keeping payments comfortable.
It’s a great example of how the right advice and careful structuring can make a big long-term difference without disrupting everyday budgets.
Top Questions Asked By You
Some lenders allow you to make overpayments without penalties, but it’s essential to check if your mortgage has limits on overpayments or any charges associated. Consult your lender for specific terms.
Making overpayments can reduce your outstanding balance, improving your loan-to-value (LTV) ratio. This could make you eligible for better rates when refinancing or remortgaging.
Yes, you can remortgage to reduce the term, but it depends on the lender’s affordability checks. Ensure your income supports the higher payments over a shorter period.
Reducing your mortgage term can decrease the total interest you pay over the life of the loan. This helps clear your mortgage quicker. However, monthly payments will be higher, so ensure they are affordable for you.
Extending the term can lower monthly payments, providing more disposable income. Consider if you have big expenses coming, like a wedding. Extending increases overall interest paid, so weigh it against your needs.
How to choose (quick decision guide)
Need flexibility? Choose overpayments. You can pause if life happens (subject to lender rules).
Want maximum discipline and interest savings? Choose a term reduction (your payment commits you to the higher amount).
On a fixed rate? Check ERCs (early repayment charges) and penalty-free overpayment limits (often up to ~10% of the balance per year on fixed deals — varies by lender).
Other priorities first: keep an emergency fund, clear high-interest debts, and consider pension/ISA contributions before aggressive mortgage overpayments.
You might have a big event coming up like a wedding or a special birthday that means you need to try and keep as much disposable income as you can. That would be the time to say to your mortgage broker that you want to reduce your payments. You could either do this by extending the term, or keeping the term the same but finding a better rate.
What actually happens
Overpayments (ad-hoc or monthly): extra goes straight to capital. Many lenders recalculate the remaining term automatically, so you finish earlier without changing your official term.
Term reduction (product/term change): you formally shorten the term; your required monthly payment rises. Total interest typically ends up similar to consistent overpayments of the same amount: the big difference is commitment vs flexibility and any fees/admin for changing the term.
Can you remortgage and reduce the term?
Yes, absolutely, although this is subject to the lender’s affordability checks. So, for example, if we’re reducing a term from 30 years down to 28 years, we need to make sure that your original borrowing is still available over that shorter amount of time. We just need to make sure that your income and expenditure means that your new mortgage payments are still affordable.
Alternatively, if you are looking at releasing money and reducing your payments, you can extend the mortgage term. I remind my clients of this often – when you apply for the mortgage or whether you’re remortgaging for the fifteenth time.
For some First Time Buyers their priority may be to have a long mortgage term such as a 35 year term – but that can be reduced in the future. You’re not necessarily stuck with a mortgage for 35 years, especially if your income increases.
Next steps
Send us your current rate, remaining term, balance, product end date, and any ERC/overpayment allowance.
We’ll compare:
- keep term + monthly overpay vs
- shorten term vs
- remortgage options, so you see time to clear, total interest, and cash-flow impact side-by-side.
Not necessarily. Remortgaging at a lower rate can reduce payments, but fees and new rates should be considered. Always evaluate if the new terms benefit your financial situation.
A better credit score can make it easier to negotiate more favourable terms or raise your payment capacity. Maintaining a good credit score is crucial for financial flexibility.
Consider paying off high-interest debts first, as they usually cost you more in interest. This can improve your disposable income, allowing you to reduce the mortgage term later.
Adding family members to your mortgage can increase combined income, potentially improving loan terms. However, this means shared responsibility, and any default can affect all parties’ credit.
If you have a variable rate mortgage, changes in interest rates will directly impact your monthly payments, even if terms are reduced. Fixed rates offer stability against such fluctuations.
We did cover this in our ‘Stay or Move’ remortgaging episode recently, so if you haven’t listened to that particular podcast, do look it up. But there are two potential answers on whether to remortgage after a fixed term. Firstly, if you are reaching the end of a fixed term of a specific product such as a two-year fixed rate deal, then yes – that is the perfect timing to look at finding a new deal. If you don’t look at arranging a new deal either with your existing lender or a new lender, when your fixed term is due to end you will be put onto your lender’s standard variable rate. This is likely to significantly increase your monthly repayments. Alternatively, you might be looking at remortgaging after the term of your mortgage has ended. Say you’ve had a mortgage for the last 30 years and you’ve just made your last payment – you would then be mortgage free, so congratulations! However, you might decide that you want to raise some extra funds on your mortgage-free property. This is always an option. You could remortgage potentially to give your family members cash towards their house purchases, or to consolidate debts. This would be subject to the property value and the lender’s criteria on age and affordability etc.Should I remortgage after a fixed term?
What advice would you give someone considering whether to reduce their term or their payments?
If it’s something that you’re looking at, either making a saving on your monthly payment or changing your term, tell your broker. Let them know what your future plans are too, as it helps us find the most appropriate mortgage options for you.
We can go over things as many times as we need to, to make sure that we’re getting that budget right for you and help you achieve your goals.
Speak with an advisor today!
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A mortgage broker can help identify suitable products for your goals and guide you through application processes. They ensure you understand terms and find beneficial rates.
Lenders consider your income, expenses, outstanding debt, and credit rating. They perform stress tests to evaluate if you can handle payments under different scenarios.
A shorter term reduces overall interest, freeing up future finances sooner. However, higher monthly payments might restrict current financial flexibility. Balance short-term needs with long-term goals.
Consolidating debts into your mortgage can lower monthly payments but increases the secured amount against your asset. Ensure the long-term costs and risks before deciding. Warning: Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Generally, you need proof of income, bank statements, ID, and details of current mortgage agreements. Lenders may request additional documents depending on your circumstances.