Four ways to bring a payment down
When a fixed rate ends at a higher one, the monthly payment usually has to change. There is more than one way to bring it down, and each route does it through a different mechanism. Extending the term, switching to interest-only payments for six months, stopping overpayments, and selling all lower the pressure now, but they leave different things behind: a bigger total interest bill, an unchanged balance, or no mortgage at all.
Putting the four side by side, on your own balance and rate, is the only way to see which trade-off you are actually making. The four-route comparison tool runs the sums on the figures you enter and shows the new monthly payment, the total interest to the end of the term, and the cost year by year for each route.
The four routes and what each one moves
Extending the term
Spreading what you owe over more years lowers the monthly payment, because each payment covers a smaller share of the balance. The balance itself does not shrink any faster, and because you carry it for longer, the total interest you pay by the end of the term goes up even though the monthly figure has gone down.
Switching to interest-only for six months
For the six months, the payment covers only the interest on the balance. That is why it is lower. At the end of the six months the balance has not moved, and the payment usually returns to where it was unless something else has changed by then.
Stopping overpayments
If you have been paying more than your contractual monthly payment, stopping the extra amount brings the payment back down to what the mortgage actually requires. Nothing needs to be arranged with the lender for this one. It does not change the term or the rate, it only removes an amount you were choosing to pay on top.
Selling
Selling ends the payment by ending the mortgage. It has the fewest figures to work through and the most at stake.
| Route | What happens to the monthly payment | What happens to the balance | How long it runs |
|---|---|---|---|
| Extending the term | Falls | Unchanged, carried for longer | For the rest of the term |
| Interest-only for six months | Falls further | Unchanged for the six months | Six months |
| Stopping overpayments | Falls to the contractual amount | Reduces more slowly than before | Until overpayments restart |
| Selling | Ends | Mortgage repaid in full | One-off |
Why the monthly figure on its own can mislead
A lower monthly payment and a lower total cost are not the same thing. A route that helps with one can work against the other. Extending the term is the clearest case of this: the payment drops, but because the balance stays outstanding for longer, the total interest by the end of the term rises. Comparing routes on the monthly figure alone hides that trade.
Which rules apply depends on whether you are behind
A change agreed while you are up to date is not governed the same way as help for someone already in difficulty. If your payments are current, a signatory lender can offer a one-off term extension or a six-month interest-only switch under the Mortgage Charter, with no new affordability assessment and no effect on your credit score. Once a lender's duty to help because you are in financial difficulty is engaged, under MCOB 13.3.1R(1A), the route runs under MCOB 13 instead, the FCA's Mortgage Conduct of Business sourcebook, and that usually brings an affordability check and a mark on your credit file showing an arrangement is in place.
The fork between the two is set out in full on which route are you asking for, including who offers each one and how each is reported to the credit reference agencies.
Mistakes people make when weighing the routes
- Comparing the new monthly payment without checking the total interest it produces over the rest of the term.
- Assuming the interest-only switch under the Mortgage Charter lasts as long as needed, when it runs for six months and the balance behind it has not moved.
- Treating a term extension that passes retirement age as routine. FCA guidance at FG24/2, paragraph 2.20, expects the lender to check retirement income before agreeing to it.
- Assuming any lender will honour Mortgage Charter terms. They apply at signatory lenders only, and that can be checked against the list of signatory lenders before relying on them.
- Not asking how a change will be reported before agreeing to it. The lender has to tell you under MCOB 13.3.4AR, but it is worth asking.
- Relying on older guidance about reversing a term extension. FG24/2, paragraph 2.21, predates a later rule change under PS25/11, which altered what a lender has to assess when a term is shortened again.
What the comparison cannot tell you
None of the four figures on its own shows whether the lender will check your affordability, what the change will show on your credit file, or whether it can be undone later. Those depend on which route you are offered and which lender you are with.
The numbers from any calculation are illustrative, built from the balance, rate and term you put in. They do not account for lender fees, early repayment charges, or a rate that changes later, and they can be wrong if the figures entered do not match what the lender actually applies. They are a starting point for a conversation with your lender or a regulated adviser, not a substitute for one. If you have already missed a payment, free debt advice services can help before you take any of these routes further.