Mortgage over what period?

milliebear00001

I took out my first mortgage over 25 years and assumed at the time that it was just what 'you did'. Now I am about to apply for a new mortgage (to purchase a new property) and am aware that I could ask to have the mortgage over a longer period. Aside from the cost, I want to keep the first couple of years repayments low as things will be tight for us until my salary increases. Am I right that there is unlikely to be a problem going for thirty years (I am 35 now) and that I can reduce this thirty year term by remortgaging when my income rises?

Any other issues anyone can foresee?

milliebear00001

anyone........?

Gogette

Hi milliebear00001

I'm 35 and took out my first mortgage (yay - at last) in March this year and mine is for 30 years.

Go to moneysupermarket and look at what's available. It will give you an idea of who will provide one for 30 years and who won't.

I don't know about the second part of your query, but I'd be interested in the answer myself.

Gogette

sphrp2

When I took out my first mortgage I wanted to make sure I wasn't strapped for cash for the first couple of years but still had a good long term mortgage and I tied myself up in knots trying to balance the two.
What I think I learned was choose the mortgage that suits you now and don't worry too much about if its 20/30 even 50 years because once your situation changes in a few years you'll probably want to change the mortgage to reflect your new situation and you can reduce the term then if you want to.

(its nice to have the facility to overpay, in case your money goes up sooner than expected! - you never know)

I'm not sure if this flies in the face of all proper mortgage advice, its just my opinion and might be worth a thought.

theladsmum

As you are unlikely to keep the same mortgage for its whole term, regardless of how long it is, I would agree - choose the mortgage for now, with an eye on how things might go in the medium term.

dimbo61

Please remember that you would pay very little off in the first few years of a "Normal" 25 year repayment mortgage so if you make the term even longer you will clear very little of the capital off and thats with rates as low as they are right now.
You need to consider " DO YOU WANT TO WORK UNTIL THE DAY YOU RETIRE" just to pay the mortgage ( please forget any idea about using the lump sum or pension when you retire! You need that to live on)
Use Martin,s website to get best value for money on EVERYTHING you buy or pay for.
Most lenders allow 10% a year ( or £500 a month with Nationwide) so you can overpay big time.
I aim to pay as little interest as possible to my lender

poppy_f1

im 33 and just took my mortgage out for 25 years, mainly to keep my payments a bit lower when i remortgage i will reduce by hopefully 5 years

nomoneytoday

The repayment difference between a 25 and 30 year mortgage probably won't be a huge amount, unless you have a huge debt.
For example, £100,000 @ 5% comes out as 584 vs 537 a month. Less than £50 a month to knock off 5 years seems a veritable bargain IMHO

dimbo61

Please use "whatsthecsot" to work out how much the mortgage you require costs over say 25/30/35 years and see how much extra interest you pay over the longer term at say 4% then work out at 7/8/9%

kiwigirl

I opted for a 34 year mortgage with Halifax when I was 30 and have been overpaying monthly making it equivilent to same cost of a 25 year mortgage (my deal) as soon as I could.

All pay increases (if I get any), vouchers equivilent etc goes as an overpayment to reduce the mortgage. Not tried to re-mortgage as yet but hope to reduce to 20 when my fix finishes in 2013, but will see what's happening at that time.

Thrugelmir

Borrow less. If money is that tight and you are banking on future pay rises to speed up debt repayments. Both tax and interest rates will rise in the short term so over committing in the current economic climate is not advisable.