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25 year mortgage vs 35 year + overpayment?
YorkshireJames
Posts: 81 Forumite
All other things being equal, am I right in thinking that you would pay the same over all for a 25 year mortgage and a 35 year where you overpaid the difference?
The only difference is that the compulsory payments on the 25 year are higher?
Sorry, just trying to figure what length of mortgage is best.
The only difference is that the compulsory payments on the 25 year are higher?
Sorry, just trying to figure what length of mortgage is best.
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Comments
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That's what i've done. Had 21 years left and remortgaged to a different product and took 30 years. I've calculated the overpayments needed to pay it off in 21 years or sooner. This way though I feel more in control if I ever need to pay less one month.
I'd caution you though that it's tempting to miss a month or two and make the lower payment. I have it set up automatically so I don't notice. Good luck.0 -
YorkshireJames wrote: »All other things being equal, am I right in thinking that you would pay the same over all for a 25 year mortgage and a 35 year where you overpaid the difference?
The only difference is that the compulsory payments on the 25 year are higher?
Yes, as long as:
- you actually *do* make the overpayments every month
- you don't incur any early repayment charges for the overpayments.0 -
YorkshireJames wrote: »Sorry, just trying to figure what length of mortgage is best.
As short as possible. The quicker the LTV improves the sooner you'll be able to access lower rates of interest.
A lot can happen in 35 years........... whatever ones best intentions are.0 -
Interesting Q, will have to remember that one, for when we hope to move next year - well once the orgs make us perm instead of ftc!!!0
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we went for a 30 year term as ftb in 2007 didn't get into a good start with overpaying but used savings to knock off £17k (6 years) so in theory now have 21 years left (1 less than if we had originally taken 25 years.)
Have enjoyed only 'having' to pay the lower payments as I'm a SAHM and have had 2 kids in 2 years. If I were to do it again I'd take the shortest term I thought that I could afford as it's too easy NOT to overpayOPs so far £42,139
Original end date Nov 2037 (53) Current end date June 2024 (40) Aiming for 5 years to be Mf
DD1 Oct 2008:), DD2 Jul 2010:), DD3 Aug 2013:)
When life is getting me down I try to remember to thank God for the blessings0
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