Reduce the mortgage term or make overpayments on current term?

happydays_70

That's it in a nutshell. Which is the financially better option?
I am unclear on this.
This is based on a repayment mortgage.

Calfuray

If you feel that you have good job security, your monthly payments are manageable even if you were to lose job/become ill/reduce income and you have an emergency fund set up to cover you for a decent amount of time - then feel free to reduce the mortgage term - get rid of it quicker.

You may want to make OPs on current term and hence reduce monthly payments to get down to a 'comfortable' monthly payment in case of issues above (not having emergency fund /poor job security etc etc)

CKhalvashi

I'd overpay, just incase other circumstances crop up.

We may not like it, but it does happen.

CK

Stroppypops

CKhalvashi wrote: »

I'd overpay, just incase other circumstances crop up.

We may not like it, but it does happen.

CK

Same here.

happydays_70

You don't do better one way or the other though?
Moneywise one doesn't work out to pay more off than the other does it?

chirpchirp

Actually you can do better to lower the term in instances where you are only allowed to make a certain percentage overpayment each year. Not sure how this works but some people on here seem to advocate it.

Personally I keep my term the same an overpay just in case circumstances change.

happydays_70

Thanks for your comments..useful x