Yes. When you remortgage, you can usually choose a different mortgage term rather than simply carrying over the number of years left on your current loan. You may be able to shorten the mortgage term to repay the balance faster, or extend the mortgage term to reduce the monthly payment. The choice is not automatic: the lender must be satisfied that the new repayment period is affordable and fits its lending criteria.
Changing the term can have a bigger effect on the long-term cost of your mortgage than changing the interest rate alone. A shorter term normally means higher monthly repayments but less interest paid over the life of the loan. A longer term usually lowers the monthly commitment, but because you are repaying the balance over more years, the total interest bill can rise.
How changing your mortgage term works when remortgaging
A remortgage replaces your current mortgage with a new deal, usually with a different lender while you stay in the same property. As part of that application, the lender sets a repayment schedule based on the outstanding balance, the interest rate and the term you apply for.
You do not have to select a term that exactly matches the years remaining on your existing mortgage. If you have 22 years left, for example, you might apply for 20 years, 18 years or a longer period, provided the lender is satisfied that the payments are affordable and the term fits its age and lending rules.
What happens if you shorten the mortgage term?
Choosing to shorten mortgage term length concentrates repayment into fewer years. Your monthly payment will normally increase because more of the capital must be repaid each month, but the mortgage is cleared sooner and interest has less time to accumulate.
There is a practical limit: the new payment still has to fit your budget and the lender’s affordability assessment. A term that looks attractive because it saves interest is not sensible if it leaves too little room for household bills, savings and unexpected costs.
What happens if you extend the mortgage term?
An extended term spreads the outstanding balance over more monthly payments. That usually reduces the amount due each month, which can make a remortgage easier to manage if the new interest rate is higher than the rate you are leaving.
The trade-off is total cost. Even if the new monthly payment falls, extending the term means you may pay interest for longer. The useful comparison is not just old payment versus new payment, but also how much interest you are likely to pay over the new term and when the mortgage will finally be repaid.
If the new term runs into retirement, the lender may look closely at the income you expect to have at that stage. FCA rules say firms should take a prudent and proportionate approach when a proposed remortgage term extends beyond expected retirement, and lenders can also apply their own age and affordability criteria.
A simple example of changing the term
Suppose you owe £180,000 and have 20 years left on your mortgage. When your fixed deal ends, you find a new remortgage rate but want to review the term as well. If you reduce the term to 15 years, the monthly repayment will be higher, but the balance is paid off five years sooner and the total interest should be lower than on the same rate over 20 years.
If instead you extend the term to 25 years, the monthly repayment should fall, but the loan lasts five years longer and the total interest cost rises. Two borrowers offered the same rate can therefore have very different monthly payments and lifetime costs depending on the term they choose.
Before applying, run several term lengths through a mortgage repayment calculator and compare the monthly payment, repayment date and total interest using the rate you realistically expect to obtain.
What will a lender assess?
A lender will not normally approve a new term simply because it produces the payment you prefer. It may consider your income, regular commitments, outstanding debts, credit history and the size of the mortgage relative to the property value. If the mortgage extends into retirement, expected pension or other retirement income may also become relevant.
Age limits vary between lenders and products, so there is no single maximum term or finishing age that applies to every remortgage. One lender may be comfortable with a repayment schedule that another will not accept.
If you are changing lenders, also factor in remortgaging costs. These can include arrangement, valuation, legal or administration charges, while leaving your current deal early can trigger an early repayment charge. A cheaper monthly payment can be misleading if fees or a much longer term make the overall deal more expensive.
Should you change the term or keep it the same?
Keeping roughly the same remaining term is often the simplest option, but it is not automatically the best one. The right choice depends on whether your priority is lower monthly payments, faster repayment or a balance between the two.
If your budget comfortably supports a higher payment, shortening the term can reduce the total cost of borrowing. If affordability is tight, extending the term can create breathing room, but check whether you could shorten it again later or make permitted overpayments if your finances improve. Always review the overpayment rules.
Useful related topics to review are remortgaging costs and fees, how mortgage interest rates affect repayments, and overpaying your mortgage. Together, they give a fuller picture of how a term change affects both monthly cash flow and total borrowing cost.
FAQ
Can I reduce my mortgage term when I remortgage?
Yes, if the lender agrees that the higher monthly repayment is affordable. Reducing the term can help you repay the mortgage sooner and usually lowers total interest compared with using the same rate over a longer term.
Can I extend my mortgage term to lower my monthly payments?
Often, yes. Extending the term normally reduces the monthly payment, but it usually increases the total interest paid because the loan remains outstanding for longer.
Can my remortgage term run into retirement?
It can, depending on the lender. If the term extends beyond your expected retirement date, the lender may assess whether your expected retirement income will support the repayments and may apply its own age limits.
Do I have to keep the same number of years left when remortgaging?
No. The remaining term on your current mortgage does not automatically become the term of the new one. You can normally apply for a different repayment period, subject to the new lender’s criteria and affordability checks.
Conclusion
Changing the mortgage term when remortgaging is a practical way to reshape both your monthly payment and the long-term cost of the loan. A shorter term can increase payments but reduce interest and bring the repayment date forward, while a longer term can lower monthly costs at the price of paying interest for longer. Compare several repayment periods using the same interest rate, include remortgage fees in the calculation, and make sure the chosen term remains affordable now and later in life.