So i have to take a 40 year mortgage to get the loan i need, bad idea?

topcat007

Hello all,

so after playing with Nationwide "Affordability Calculator" i have to take a loan for 40 years to get the loan amount i want. I know for I can pay this in 25 years or less as i am quite savvy and they must be using very high averages of spending and assuming i have a car etc etc.

Is there any downfall to 40 years as this seems very extreme? I know i could overpay every single month to bring it down to 25 years, but is there any major issues or disadvantages to this length ?

I can see the massive advantage of having one month very low payment if i got desperate or in a mess for some reason.

Thanks for everyones help on here you all have been great!!

Thrugelmir

One downside. You don't overpay every month. While you start with good intentions will it continue. When finances get tight. Or a holiday beckons.

topcat007

Thrugelmir wrote: »

One downside. You don't overpay every month. While you start with good intentions will it continue. When finances get tight. Or a holiday beckons.

Thanks very much!

I would stick to it very disciplined with these things they are not to be messed with.

I assume you could always shorten the term after a few years ? But then again why would you want to.

Let_Us_See

topcat007 wrote: »

I assume you could always shorten the term after a few years ? But then again why would you want to.

The longer the term the more interest you pay.

Interesting that Nationwide believe you need a 40 year term to meet affordability, but you believe 25 years will be ok?

amnblog

Not smart to make a decision on the term of your mortgage based on a single lender's affordability calculator.


You should note - Nationwide's calculator of affordability is based on market experience. If it says you cannot afford the mortgage over 25 years - somewhere there is a message.

topcat007

Let_Us_See wrote: »

The longer the term the more interest you pay.

Interesting that Nationwide believe you need a 40 year term to meet affordability, but you believe 25 years will be ok?

amnblog wrote: »

Not smart to make a decision on the term of your mortgage based on a single lender's affordability calculator.


You should note - Nationwide's calculator of affordability is based on market experience. If it says you cannot afford the mortgage over 25 years - somewhere there is a message.

Please tell me if i am being naive but i am guessing their affordability calculator will be thinking:

*Car, insurance , petrol - just endless money pit
*Expensive TV + Broadband package
*Eating out at restaurants
*Expensive pay monthly phone
*Expensive holidays
*Gym Membership

None of these apply to me...

Am i seriously overlooking something i have budgeted for:

Council Tax
House Insurance
Electric
Water
Food + Toiletries
TV License
Small amount of pocket money each month
X amount of savings a month


They seem to be the only lender which has this ridiculous affordability calculator . All the other banks clear what i am looking for by at least 12,000+ and look to be happy with 25 years on the quick calculators.

Although i am thinking if i got into difficulties i have the option of the lower payments on a 40 years. Although i really don't want to be doing this , would be pretty desperate situation..

amnblog

Why not use another lender then!

ACG

Gas?
Travel,
Birthdays/xmas,
Boiler breakdowns/fences blowing down in gales (my neighbours being prime example waiting for them when they get home from work) - basically anything that goes wrong.
Socialising - is it worth having a house but no social life?
Mobile phone/internet?
holidays,
Pensions,
Income protection/life insurance/pet insurance etc?

If your comfortable you can pay it then go for it, but its not worth (in my opinion) having a house and being glued to it because you have no free money.

I know I can afford to do my mortgage over a shorter period that the lender says I can, but im not sure I could knock 15 years off it. They do tend to use ONS figures which is an average of people who live frugally and lavishly.

topcat007

amnblog wrote: »

Why not use another lender then!

Rate is 0.49 more..

topcat007

ACG wrote: »

Gas?
Travel,
Birthdays/xmas,
Boiler breakdowns/fences blowing down in gales (my neighbours being prime example waiting for them when they get home from work) - basically anything that goes wrong.
Socialising - is it worth having a house but no social life?
Mobile phone/internet?
holidays,
Pensions,
Income protection/life insurance/pet insurance etc?

If your comfortable you can pay it then go for it, but its not worth (in my opinion) having a house and being glued to it because you have no free money.

I know I can afford to do my mortgage over a shorter period that the lender says I can, but im not sure I could knock 15 years off it. They do tend to use ONS figures which is an average of people who live frugally and lavishly.

Public transport for travel .

I do need to look at life insurance that is something i will be getting a quote for today also the Income protection.

Don't have a pet , have enough of my own mess to clean up :rotfl:

I think if anything went wrong would be where a problem could occur

Thanks for your help i am going to double check i am not being too frugal !!

amnblog

topcat007 wrote: »

Rate is 0.49 more..

The Nationwide rate is 0.49% lower for those to whom Nationwide consider it affordable.


If they consider it affordable to you over 40 years, that's the term you need to take to get the rate.