Mortgage term

Rebecca01

Hello

Can anybody tell me if the mortgage amount that you are able to borrow decreases proportionately or is it ( if on a graph) a curve due to the interest?

So if a calculator suggests it's possible to borrow 250k over 25 years , over 13 years will this be half so 125k or more as there's less interest?

Thanks.

ACG

It will be less, but it probably wont be half.

The longer the period you take the mortgage over, the more of your initial payments go towards interest rather than paying down the mortgage.

You would need to mess around with some lenders calculators to get an idea.

Twiggy_34

I think you'll find it will be more than £125k due to interest. I often use HSBC's calculator tools to work out such things (other providers may offer similar tools but have always got on well using these).

http://www.hsbc.co.uk/1/2//mortgages/repayment-calculator

According to this tool (which defaults at a 7% interest rate but can be changed) after 13 years with no change to rate or overpayments you'd have a balance of £172.071.

ACG

Twiggy_34 wrote: »

I think you'll find it will be more than £125k due to interest.

I have just read my post back....

I meant it will be less than £250k, but it wont be half... as in it will be more than half.

This is an example of why i got a D in English at school!

Twiggy_34

ACG wrote: »

I have just read my post back....

I meant it will be less than £250k, but it wont be half... as in it will be more than half.

This is an example of why i got a D in English at school!

Ha ha, don't worry, I amended my post too for clarity around a similar point that was at risk of miscommunication

getmore4less

Won't it be done on adjusted affordability?

if it is then it should be less than 1/2

if you can afford £500 per month, longer the term the more you can borrow.

eg. £500pm @5%

5 £26500
10 £47200
15 £63300
20 £75800
25 £85600
30 £93200
35 £99100
40 £103700
IO £120000