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  • FIRST POST
    • Bowsa
    • By Bowsa 15th Sep 17, 9:27 AM
    • 17Posts
    • 0Thanks
    Bowsa
    How Long should I take a mortgage out for
    • #1
    • 15th Sep 17, 9:27 AM
    How Long should I take a mortgage out for 15th Sep 17 at 9:27 AM
    Hi all,

    I am getting mixed messages from friends and family.

    currently looking to buy a house (1st time buyer) I am 30 my partner is 28.
    so when looking at mortgages, I don't know how long I will get a mortgage for (40 being the longest, and I will certainly still be working by then imo) however I don't know if I would be accepted for that.

    So really looking for whether I should go for the longest period possible to keep repayments as low as possible

    or

    Whether I should go for something like 25 years and get it paid off ASAP.......

    and what the likely hood of getting an longer mortgage would be?

    TIA
Page 1
    • getmore4less
    • By getmore4less 15th Sep 17, 9:32 AM
    • 29,753 Posts
    • 17,791 Thanks
    getmore4less
    • #2
    • 15th Sep 17, 9:32 AM
    • #2
    • 15th Sep 17, 9:32 AM
    Longer term and overpay does the same as shorter term but gives the option to have the small payment.
    • Bowsa
    • By Bowsa 15th Sep 17, 9:35 AM
    • 17 Posts
    • 0 Thanks
    Bowsa
    • #3
    • 15th Sep 17, 9:35 AM
    • #3
    • 15th Sep 17, 9:35 AM
    Thanks for the reply, do you not get penalised for over paying?
    • getmore4less
    • By getmore4less 15th Sep 17, 9:50 AM
    • 29,753 Posts
    • 17,791 Thanks
    getmore4less
    • #4
    • 15th Sep 17, 9:50 AM
    • #4
    • 15th Sep 17, 9:50 AM
    most have some allowance(eg 10% of borrowing) and FTB tend to have high LTV so chose products that they can change in 2-5 years as the LTV improves the rate goes down so have the option to save and pay off lumps if they hit a penalty overpayment.

    in most cases it is not an issue
    £100k 4% over 25y £530pm 40y £420pm

    10% overpayment over £800pm well within the difference.
    • SeduLOUs
    • By SeduLOUs 15th Sep 17, 9:53 AM
    • 2,073 Posts
    • 2,460 Thanks
    SeduLOUs
    • #5
    • 15th Sep 17, 9:53 AM
    • #5
    • 15th Sep 17, 9:53 AM
    I personally opted for a long term deliberately to leave wiggle room for small payments if something happens and money gets tighter. I hope to take advantage of the fact I can overpay 10% without penalty to reduce the mortgage length in real terms but without committing myself to it and possibly overstretching myself if something goes wrong.
    • Boredatwrork
    • By Boredatwrork 15th Sep 17, 10:00 AM
    • 151 Posts
    • 168 Thanks
    Boredatwrork
    • #6
    • 15th Sep 17, 10:00 AM
    • #6
    • 15th Sep 17, 10:00 AM
    Check with your bank regarding over payment limits to be sure.

    Just don't fall into the trap a longer term with the intention of over payments, then spend the difference on cake. You need to try and stay committed.
    • amnblog
    • By amnblog 15th Sep 17, 10:00 AM
    • 9,734 Posts
    • 3,760 Thanks
    amnblog
    • #7
    • 15th Sep 17, 10:00 AM
    • #7
    • 15th Sep 17, 10:00 AM
    Take a mortgage out for the shortest term you are certain you can afford.

    The longer you have a mortgage, the more it costs you overall - that is the plain fact.
    Last edited by amnblog; 15-09-2017 at 10:14 AM.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Boredatwrork
    • By Boredatwrork 15th Sep 17, 10:10 AM
    • 151 Posts
    • 168 Thanks
    Boredatwrork
    • #8
    • 15th Sep 17, 10:10 AM
    • #8
    • 15th Sep 17, 10:10 AM
    Take a mortgage out for you shortest term you are certain you can afford.

    The longer you have a mortgage, the more it costs you overall - that is the plain fact.
    Originally posted by amnblog
    Yes but it can countered by over payments.

    When it boils down to the variables there are really 2 factors involved in maximising the overall savings

    1. The amount you pay (be it via regular payments or over payments, it doesn't matter)
    2 The quicker the payment is made (based on many mortgages interest being calculated daily)

    The term just reduces/increases the amount you pay, and the difference can be made up (and increased) by over payments.

    I am sure you know this.
    Last edited by Boredatwrork; 15-09-2017 at 10:16 AM.
    • amnblog
    • By amnblog 15th Sep 17, 10:15 AM
    • 9,734 Posts
    • 3,760 Thanks
    amnblog
    • #9
    • 15th Sep 17, 10:15 AM
    • #9
    • 15th Sep 17, 10:15 AM
    I am sure you know this.
    Originally posted by Boredatwrork
    I would hope so.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Boredatwrork
    • By Boredatwrork 15th Sep 17, 10:17 AM
    • 151 Posts
    • 168 Thanks
    Boredatwrork
    I would hope so.
    Originally posted by amnblog
    Me too, it says Mortgage Broker in your signature.
    • kingstreet
    • By kingstreet 15th Sep 17, 11:03 AM
    • 31,913 Posts
    • 17,057 Thanks
    kingstreet
    As a broker you get to see more of human nature.

    Some clients consolidate debt on a regular basis, despite promising every time they won't continue to use their homes like a cash machine and use debt to live outside their means.

    We would use the shortest term which meets lender affordability. If the client wants a longer term, that's their choice. The facility to overpay is important, but in reality many people will prioritise everything else ahead of it, kids, holidays, cars etc) until they are in their 50s when everything else has dropped away...
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Bowsa
    • By Bowsa 15th Sep 17, 12:19 PM
    • 17 Posts
    • 0 Thanks
    Bowsa
    Could I remortgage at any point and change the payment term?
    • kingstreet
    • By kingstreet 15th Sep 17, 12:37 PM
    • 31,913 Posts
    • 17,057 Thanks
    kingstreet
    Yes. Provided you meet affordability for the shorter term.

    BTW you'll find only a handful of lenders will offer a 40 year term. a 35 year maximum will leave more lenders and probably better rates to choose from.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Bowsa
    • By Bowsa 15th Sep 17, 12:44 PM
    • 17 Posts
    • 0 Thanks
    Bowsa
    Thank you all - is there different "qualities" of mortgages ......or do you just go for the cheapest one that comes up (i.e i'm using money supermarket, to check for mortgages are the all the same or do they have things I should look out for like car insurance)?
    • kingstreet
    • By kingstreet 15th Sep 17, 1:05 PM
    • 31,913 Posts
    • 17,057 Thanks
    kingstreet
    The combination of fees, rate and cashback primarily.

    Then, if you want to overpay, is it 10% of balance, 10% of original loan amount, or 20% of balance.

    ERC levels? Stepped and reducing or level?

    You have to determine the issue important to you. There is no one-size-fits-all solution.

    As long as you and the property fit lender criteria, you can select from the above.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • getmore4less
    • By getmore4less 15th Sep 17, 1:49 PM
    • 29,753 Posts
    • 17,791 Thanks
    getmore4less
    As well as the above

    LTV tier points fees and rate difference for retention deals if starting out at very high LTV.

    if circumstances could change a good retention deal to fall back on can be worth a bit on the initial rate.
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