5 year vs paying off a 20 year early?

jonathanh1989

Hi everyone

I'm totally new to how mortgages work. I have 20k for a deposit and earn 14k a year plus about 3.5k in tax credits/child benefit. I'm looking at houses in the region of 75k, so a 55k mortgage.

I reckon I could pay the mortgage off in 5 years (or at least most of it) with some extreme thriftiness but obviously the banks will not give me a 5 year mortgage, nor a 10 year mortgage it seems.

Are there any disadvantages, besides early repayment charges, to getting a 20 year mortgage and paying it off in 5 years vs getting a 5 year mortgage?

Thanks, Jonathan

samba

As long as you get one that allows large enough overpayments.

I have just got a lifetime tracker with unlimited payments and took it over 24 years (the maximum I could get) with the idea that I could make overpayments to pay it off early, but if money was tight one month then I would just fall back to the regular payment.

My last mortgage I took over 15 years cos I wanted to pay it off quickly, but I realised after that I had commited myself to higher payments than I needed to.

stator

As above, overpayment penalties are common, typically anything over 10% will attract penalties. So if you really want to pay off that quickly you'll have to find a mortgage that allows more overpayments.

jonathanh1989

That's great news thaks for the advice!