Higher intertest + longer term Vs lower interest + shorter term

Scooby_Man

Hi

I was wondering which is better:

1. When interest rates are high, extend the term of the mortgage to pay less each month

or

2. When interest rates are low, reduce the term and pay more each month (or just overpay)

Given that you have a lump sum that you can drip feed into the mortgage.

Common sense would seem to dictate that one should pay off as much as they can asap, but i am not quite sure...

save-a-lot

I was wondering which is better:

1. When interest rates are high, extend the term of the mortgage to pay less each month

In answer to this I would say pay off as much as you can, if you get into financial difficulty extend the term at that point to reduce outgoings

or

2. When interest rates are low, reduce the term and pay more each month (or just overpay)

Yes, overpay whatever you can. If your rates are really low consider saving the money at savings rates above the mortgage rate if that is possible.