25 years?

Glastoun

Why is 25 years assumed to be the standard length of a mortgage?

Are 30+ year mortgages necessarily a bad thing, and if so why?

Do lenders take the length of time into account - e.g. we opted to pay over 20 years, would that show that we thought we could afford higher monthly payments and show willing to clear the debt earlier, or would it actually count against us because the monthly payments are less affordable?

Let_Us_See

You have to start somewhere, and 25 years is the accepted industry standard, but applicants often select shorter or longer terms. Just remember the longer the term the more interest is payable.

ChopperST

I always set the terms of my mortgages longer than I need them to keep the monthly payments low in the event of any type of emergency. What we actually pay varies but we always pick a mortgage product we can pay up 10% off a year with no penalties e.g at the moment due to overtime and extra self employment work I overpay £800-£1000 extra off a month.

I am quite financially disciplined however and you need to be to work it that way but we find it quite useful for us. We are also planning a family in the near future so the idea is rather than save at a pathetic interest rate we are paying down our mortgage and if needs be when the time comes we can take a payment holiday up to the amount of overpayments we have made.

Hope this makes sense and GL whatever you decide. It becomes quite addictive trying to overpay each month and soon adds up over time.

Idiophreak

Yeah, I like to push the term out longer, too - while interest rates are so low, I think the added flexibility's worth any extra interest paid...always want to be able to overpay, of course...

Ronaldo_Mconaldo

We took our mortgage over 30 years when I was 27 and wife was 26 with the idea of being cautious but being able to over pay and reduce the term if we wanted. In 5 years we have knocked 10 years off through overpayments so 15 years to go.

John1993_2

It's always worth looking at what difference shortening or lengthening the mortgage has on payments. The only reason that people normally have to lengthen it is to reduce the monthly payments, but it often doesn't make much difference at all once you get past about 25 years. Saving £20 a month may feel great now, but realising in 25 years that you have to make another 60 payments feels very different.

In terms of why 25 years became standard, it's probably because at one time that was the "sweet spot" where the gains from extending were not so great, and the extra costs of shortening it quickly ramped up.

I've recently remortgaged, and went for a 10 year term.