Small mortgage needed - best options

needahol

Apologies in advance. I'm sure similar questions have been asked but I don't normally venture to this area of the boards

Anyhow, if I anyone can offer any advice, I'd be grateful

I'm 38 and have around £110k equity in my current house and I'm looking to downsize and buy a house that I think I could get for £140k

This obviously means I would need a small mortgage for £30k. I realise that this isn't a huge amount. Does anyone have an opinion on mortgage type (I'm confused over all the products) and also, is it best to get a mortgage over 25 years and overpay or take out a mortgage over say 10 or 15 years at the outset (I'd ideally like to be mortgage free before I'm 50)

I'm not tied into my current mortgage and the property is solely my responsibility

Thanks in anticipation

Let_Us_See

Shortest term pays the least interest. Maximum term is 12 years, if you want to be mortgage free at 50! Select Capital and Interest repayment method to ensure mortgage is re-paid on time. I recommend you calculate how much you could comfortably afford to pay per month as this will ultimately decide the term - hopefully, a lot less than 12 years.

Product options - basically, fixed rate or base tracker? You appear a cautious person so I guess a fixed rate, rather than a variable rate, would suit you better and have the advantage of being able to budget your monthly mortgage payments.

needahol

Thanks..just had a quick look and taking £30k over 12 years works out at around £250ish a month. I'm paying around £400 now and will be going from council tax band D to B so that's easily affordable. I wasn't sure whether, if I got a mortgage over 25 years but consistently overpaid every month so paid it off in 12 years anyway, it would work out the same (if that makes sense)

Actually, if I stuck to my current monthly payments, I could be mortgage free in 7 years and would still be better off due to the council tax reduction.

Gorgeous_George

The smaller the mortgage the greater the impact of upfront fees.

You could consider an offset mortgage. Borrow more but stick the excess in the offset savings account. Again, avoid the higher upfront fees.

Offer less for the house that you want to buy but hold out for top dollar on the house that you are selling.

GG