Help with soime number cruncing on how much extra Ill pay...

evosy1978

Hello,

Were deciding on our mortgage duration. My partner is pushing for me to have it over 25 years for cheaper monthly payments and then when our 5 year fix is over, we can consider changing to 15 years for the next deal....

I, on the other hand I just want it over 20 years from the start.


MY QUESTION IS..
What kind of difference are we looking at in terms of quantity paid back over the duration of the 20 years between my partners route and mine.

House price is £137680. 30% deposit. £41304. So the LTV is £96376. We have been told the monthly payments at 2.99% would be £460 over 25 years and £540 over 20 years.

The mortgage has a 10% overpayment facility. !!

If someone can help me with some number crunching I would be very grateful.

Thanks

dotdash79

Do it over 25 years and over pay like it's a 20 year term. If things get tight then you have a bit of breathing room.

evosy1978

Sounds like a good idea.

So just to confirm. If I overpaid 10% p/a on a 25 year mortgage, for the whole duration then how long would it take to pay of? 22.5 years?

thanks

kingstreet

Try this;-

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Thrugelmir

evosy1978 wrote: »

We have been told the monthly payments at 2.99% would be £460 over 25 years and £540 over 20 years.

The likelihood that the average interest rate you'll pay over the term of mortgage, will be 2.99% is very low.

The earlier you pay off the debt the more interest you'll save over the term of the mortgage.

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” - Albert Einstein

Yorkie1

I agree with the proposal to make it 25 years and overpay within the permitted limits as funds allow.

If this is a new property (to you), there are bound to be unexpected expenses - whether by preference or necessity - and it's good to have the flexibility to be able to deal with them when you want to.