30 or 35 year mortgage

Philip624

Looking to move house and will need to redeem our current mortgage which has 20 years to go. Fixed rate ends in Nov and we wont move til around June time so the redemption cost is not too bad. Need to borrow an absolute max of £150,000 but likely to come a couple of grand under this.

As we are both 32 we said we would consider going back to 25 or even 30 years as we are still young enough and once the fixed rate ends on the new place say for example 5 years we could look to re-mortgage again but instead of 20 or 25 years at that point we could bring it in a little to 18 or 23 and do this each time dependent on our circumstances then. In addition my wife is working part time at the moment but will want to go back full time in around 5 years

Our mortgage adviser has sent us a figures based at 4.99 fixed for 5 years for a 20, 25, 30 and 35 year mortgage. Figures for 20 and 25 years are not affordable. Figure for 30 is tough but if I got promotion affordable. As things stand figure for 35 years is affordable now.

Just wonder what peoples views are on going for a 35 year mortgage. Again there may be scope in 5 years too bring it in bya year or two and then agin after another fixed rate. We are also highly likely to recieve a big inheritance by 35 years time, probably closer to 25 years which would pay everything off.

silvercar

Take the option you can afford. if you do want to make extra capital repayments then use them to reduce the term of your mortgage not the monthly repayments.

Either get a mortgage that allows penalty free capital repayments or discipline yourself to save up the money until your fixed term ends and then make a capital repayment.

herbiesjp

Difficult to say without knowing your circumstances - but affordability has to be your main concern.

Are there no cheper deals that you could look at?

Sumostar

Hi

I think the decision depend on what's likely to happen in the future and how important your lifestyle is. My initial reaction would to go for the shorter term. This is cheaper in the long run but involves some pain now; but all things being equal the pain should ease off as wages rise and your mortgage stays the same.

However, if your job is not secure or you think you might be adding to your family then you might not want to be under such tight financial control. From a personal point of view I went for the longer option because I know there's a good chance I will inherit a reasonable sum of money in the next 10 - 20 years, so why go through the pain now when the inheritance would pay off the entire mortgage a number of times over.

You might also want to consider fixing the rate for the entire life of the mortgage as I have done.

Joe_Bloggs

This is a very good comparison site
http://www.moneyfacts.co.uk/mortgages/search_v3/MortgageCriteria.asp
I found a Nationwide offer of 4.79 fixed for 5 years at £786 per month. There were about 15 other deals that ranked as costing less over the period of five years. Some were constantly as low as 4.4% but with high fees. Others started very low and shot up. Loan to value is an important factor in getting these rates. You must also earn enough to qualify for the mortgage on the new property. Some lenders do not count certain types of income where others do.
Clearly your mortgage advisor has made a projection to illustrate for you the future costs of an average mortgage deal sometime in the future. They may or may not be able to offer all of the deals that are available. You won't know what you have not been offered unless you do your own searching.
J_B.