Minimum mortgage term?

sarah_elton

Quick question for the brokers on here - do lenders have any minimums on their mortgage terms? OH and I are pondering the option of taking our mortgage out over only 10 years, possibly as low as 5 at a minimum.

Would banks go for that? And can you get a 5 year fixed rate deal with a term of only five years?

benjo

Just checked out my mortgage lender, they will lend for a minimum of 5 years and for a minimum of 10k and they would be prepared to offer a fixed rate for that period - at least thats what their website says, Im guessing they are not alone in this - but I cant be sure.

sarah_elton

Thanks benjo - just had a look at HSBC who we bank with and they'll do five years too. Ok so could have answered the question myself. I assume most lenders would be the same...

koexelek

5 years is usually the minimum term, but you can usually pay the mortgage off without penalty after the tie in period, if that is less than five years

BritRael

A few years ago I took out an interest only mortgage with the Nationwide. The term was 15 years (I think) but I told them that I intended to pay it off in two years with regular payments (with no penalty). This I achieved. So I suppose if you have the flexibility to pay it off at will, you can set your own duration

sarah_elton

BritRael wrote: »

A few years ago I took out an interest only mortgage with the Nationwide. The term was 15 years (I think) but I told them that I intended to pay it off in two years with regular payments (with no penalty). This I achieved. So I suppose if you have the flexibility to pay it off at will, you can set your own duration

It's true. We're debating how long to do the term over. But we want a fixed rate and most limit you to 10% overpayments. Obviously we could put other money in savings and put it in at the end of the fixed term, but it still seems that shorter term = less interest paid. On the other hand, you lose some flexibility by committing to the higher payments. Lots to weigh up.