Mortgage Term

Calibos

Hi,

Im not sure what mortgage term is best for my needs.

Im a ftb but only plan to be in my first home for about 3 or 4 years, which is when my girlfriend will have her debts paid off.

We will then get a joint mortgage for a better place.

Should I pay more each month on a 20 year term or get a 30 year term ?

Im just asking because I read somewhere that the capital on a repayment mortgage doesn't really star getting paid off for about 15 years into a mortgage.

thanks

originalmiscellany

The first few years, you only really pay interest off. It's tremendously frustrating to see how little you pay off for the first few years. Hugely disappointing.

Thrugelmir

Calibos wrote: »

Im just asking because I read somewhere that the capital on a repayment mortgage doesn't really star getting paid off for about 15 years into a mortgage.

thanks

After 20 years of repayments you''ll still owe 40% of the original capital advance on a 25 year term.

For flexibility choose a term such as 25 years. However budget on overpaying in the early years. As more than likely you'll want to move at a later date. Building equity and reducing the interest charged is the key to a seamless move up the ladder.

Calibos

Thrugelmir wrote: »

After 20 years of repayments you''ll still owe 40% of the original capital advance on a 25 year term.

For flexibility choose a term such as 25 years. However budget on overpaying in the early years. As more than likely you'll want to move at a later date. Building equity and reducing the interest charged is the key to a seamless move up the ladder.

As I hope to move after 3 or 4 years then, I guess it may be best for me to go with a 30 year term for the lower monthly payments ?

sorry im a bit confused .

ViolaLass

Calibos wrote: »

As I hope to move after 3 or 4 years then, I guess it may be best for me to go with a 30 year term for the lower monthly payments ?

sorry im a bit confused .

All that will achieve is that after 3 years, you'll have paid less of the capital off (than you would with a 25 year mortgage).

Gorgeous_George

I would rent while I learn about mortgages. Besides, house prices may fall over the next 3 to 4 years.

If you choose to take a repayment mortgage, you will repay some capital with each and every payment made. You will also attract interest at the mortgage rate for any capital that is not repaid. It is how all loans work.

You could end up spending as much on legal fees, estate agent fees, stamp duty and repairs/refurnishing as you do on paying your mortgage. Consider renting until you are both in a position to buy a house that you want to live in for 10 years.

GG