30 year mortgage

Lifes_Grand_Plan

Hi folks,

My wife and I are currently considering moving house and our next purchase will be a lot bigger than what we have now... not too relevant but current house was £126k (mortgage now down to £47k) and next house will be £300 - £330k

Anyway because we are stretching ourselves a bit more, and because we are thinking of another child in coming years, I was wondering about taking a 30 year mortgage term rather than 25.... it would probably be a 5 year fix...

My plan would be to take the 30 year mortgage but then overpay at the amount the 25 year mortgage would have cost us. The benefit of doing this is if anything was to happen, we can cancel the overpayment and use the cash elsewhere.

Is that a good idea or is there good reason not to do this? As far as I can tell, the deals offered don't change between 25 and 30 year terms.

Thanks

TrickyDicky101

Assuming the 30 year term wouldn't take you beyond retirement (which might limit your lender choice) it sounds like a sensible plan to me.

libf

That's what I'm doing; 30 year mortgage but will overpay to slightly more than 25 year payment level. Although as said above, the ability to do so will likely depend on your age.

lucie_1985

It's a good idea, so good in fact it's what I'm doing The only thing to keep in mind is the discipline to keep the overpayments going and only cancel when it's really needed.

charliewocka

We've gone for a 29 year mortgage (Mr FW is too old to get 30! That has caused some amusement amongst ourselves! ). We decided to go for the 29 year to bring our affordability down but have a view in mind to plough all our bonuses, savings etc. into the mortgage once the fixed term is over.

Lifes_Grand_Plan

lucie_1985 wrote: »

It's a good idea, so good in fact it's what I'm doing The only thing to keep in mind is the discipline to keep the overpayments going and only cancel when it's really needed.

Thanks all.

I'm 34 at the moment so should be ok on that side of things.

Also the discipline shouldn't be a problem, i've overpaid my mortgage ever since I had one (8 1/2 years)..... I rang the mortgage company a week after completion on my current house and they couldn't quite understand that I hadn't even made one mortgage payment yet but already I was wanting to permanantly overpay.

I currently pay £1000 per month on a £400 minimum payment.... the mortgage listed above will probably be £900 minimum payment (over 30 years) so will still be £1000 to me = happy days...... any extra I can't pay i.e. limits on overpaying on the fixed rate, can be put into savings until the fixed rate ends then whack a lump sum off it.