Hi - we are not in mortgage arrears (have never missed a payment) and are not in negative equity. However, due to changed circumstances (job loss and a new child) we are struggling and eating into our small savings. We foresee trouble ahead. Our mortgage has 14 years to run and we thought to extend the term by 5 years, and we put in a request to this effect to the bank. I am a public sector worker aged 47, so we thought this would bring us to retirement age. If my spouse (10 years older than me) gets work in the future (as we hope he will) then we will overpay and bring the term back down.
The bank have instead offered us reduced payments for 12 months. They say that this will be followed by higher repayments after this period than set out in the mortgage loan offer letter, as the term will not be extended. This seems to me like lending us money for a year and then asking for it to be re-paid next year, not a restructuring of our mortgage over the long haul. We thought we would appeal to their Mortgage Appeals Board. Are there any good arguments in favour of a term extension rather than a short-term payment reduction?
The bank have instead offered us reduced payments for 12 months. They say that this will be followed by higher repayments after this period than set out in the mortgage loan offer letter, as the term will not be extended. This seems to me like lending us money for a year and then asking for it to be re-paid next year, not a restructuring of our mortgage over the long haul. We thought we would appeal to their Mortgage Appeals Board. Are there any good arguments in favour of a term extension rather than a short-term payment reduction?