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Request adviceWhen it comes to mortgages and repayment schedules, there's a lot to consider. One of the biggest decisions homeowners face is when a credit agreement expires. This is often called 'refinancing' and is a pivotal point when financing of property falls into renegotiation.
Interest rates, applicant requirements and bank offers can look massively different at the end of a 3-year mortgage as they did at the start, and is even more of an issue with long-term mortgages totalling 10 years or longer. When evaluating your initial options, it pays to consider all the possible arrangements out there and strike at the right time. If you hesitate too long, you may find yourself having to settle for a second-rate repayment plan.

Possible ways to extend your mortgage
When it comes to refinancing and renewing a mortgage, there's several options available to you that won't require you fork out for additional costs, including:
- Stay with your current bank
This is definitely worth considering if your bank or insurance provider offers you an enticing offer of follow-up financing. However, it's essential you weigh up the new offer in relation to any cuts in the market. Before signing a new contract, you'll also want to make sure you've touted other banks and institutions for comparative offers to give you the best possible chance of securing a lucrative interest rate.
- Extend your mortgage elsewhere
No matter how great the conditions at the start of a mortgage, there's also the possibility you could end up in a completely different situation at the end of the initial period. If your current bank or provider has dramatically changed their terms, look elsewhere for favourable offers and low interest rates.
- Change the type of mortgage you have
In many cases, it might prove the best strategy to change your mortgage to a new form. For example, you may wish to switch from a fixed-rate mortgage to a LIBOR mortgage, or vice versa. You can opt for a change no matter whether you're sticking with your current bank or moving your mortgage to a new one.
Deadlines and scheduling
One of the biggest things to consider when making changes to your mortgage are notice periods. Notice periods must be strictly adhered to and can dramatically benefit your situation, no matter which way you choose to proceed. Not only can you strengthen your position with your existing bank when it comes to renegotiation, you're also left with the flexibility to remain with your existing provider if you decide against taking a rival offer from elsewhere.
Anyone who plans to extend their mortgage can arrange a fixed interest rate for follow-up financing before the end of their current contract. Such options can be discussed and agreed upon up to 24 months before the contract expires. It's worth considering that these kind of agreements can incur large charges, so remember to ask for an outline of costs before entering into extended discussion. Although charges may seem steep, it's definitely worth considering this option as they can yield low interest rates for long-term savings.
It is possible to withdraw from a mortgage before the end of your contract, however this doesn't always prove cost effective. Even if you're chasing a lucrative new interest rate, the difference you'll have to settle with your current provider will often total more than the savings you'll make with a new one. Make sure you're completely clued up on every available option before making the leap with a withdrawal.
MoneyPark is on hand to ensure you make the right decision when it comes to mortgages. Get the right advice and invaluable insights every time when you speak to our dedicated team of consultants. We can provide you with guidance on the best way to go when it comes to extending your mortgage, with connections with more than 150 financing partners. Whatever the next step, get quality advice and transparent insight into the current state of the market to make the best decision possible.
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