Dumb mortgage length question

Tancred

Riggster wrote: »

And, more sensibly now I've read the thread properly, the shorter period you have your mortgage over, the less you pay in interest. If you can afford it, higher monthly payments and a shorter term would generally be best.

Interest is basically rent on money borrowed. As long as you can afford to pay it comfortably it's not an issue.

Tancred

donfanatico wrote: »

Talking about 65 pension age. So what happens if I will reach pension age shorter than 25 years so have to take a mortgage of 20years but then the repayments are too high

Any chance for us old timers to get on the property ladder at all?
Do any lenders do it over 65 years of age?

thanks

Either you (1) buy a cheaper property or (2) work longer and go for a lender that will accept later retirement age or (3 - if you are very lucky) ensure that you have a sufficiently large pension to enable you to pay the mortgage in retirement.

SuzieSue

kingstreet wrote: »

I must be being really dumb here, but if you accelerate repayment by taking a shorter term, the 10% is then 10% of a lower outstanding balance at the end of the year than would be the case on a longer term?

Did you go for a different product without the 10% limit then?

Yes, the 10% is lower on a shorter term, but the whole reason for me taking a short term was so that my monthly repayments were higher.

From memory, over 5 years, my monthly payments were £1,800 a month. If I had taken the same loan over 25 years then my monthly payments would have been much lower and the total repayments in a year (monthly and 10% over-payments) would still have been lower lower than the repayments I made in a year on the 5 year loan.

SuzieSue

kingstreet wrote: »

Did you go for a different product without the 10% limit then?

Because I wanted a 5 year fix and that was the lowest rate I could get. All the fixes at that time had a 10% restriction or if they didn't then the rate was much higher.