Advice about re-mortgaging for how many years pls?

Rich1234a

Hi,

I wonder if anyone can offer me advice please?

I have a 25 year mortgage which has 19 years left. I am re-mortgaging with first direct as I want the option for unlimited overpayments - I want to pay off my mortgage asap.

I plan to have a 2 or 3 year fixed rate and have it paid off in that time with said overpayments.

My question is should I re-mortgage over a shorter term? i.e. 10 years? or should I leave it at 19 years.

I know that when shortening your term you have to be careful in case you get into financial difficulty - and then you can't easily switch back to smaller payments, but I have worked out that I could still easily afford the payments if it were over a 10 year term.

My question is, is there mathematically / financially a better way to go? ie. will I end up paying less by choosing one option?

Many thanks in advance,
Rich

libf

Rich1234a wrote: »

Hi,

I wonder if anyone can offer me advice please?

I have a 25 year mortgage which has 19 years left. I am re-mortgaging with first direct as I want the option for unlimited overpayments - I want to pay off my mortgage asap.

I plan to have a 2 or 3 year fixed rate and have it paid off in that time with said overpayments.

My question is should I re-mortgage over a shorter term? i.e. 10 years? or should I leave it at 19 years.

I know that when shortening your term you have to be careful in case you get into financial difficulty - and then you can't easily switch back to smaller payments, but I have worked out that I could still easily afford the payments if it were over a 10 year term.

My question is, is there mathematically / financially a better way to go? ie. will I end up paying less by choosing one option?

Many thanks in advance,
Rich

I would leave it at 19 years, use a mortgage calculator to work out what the payment would be for 10 years, and then pay that.

Only thing I can think of that would make this more expensive is that you pay a redemption fee if you redeem before the full term completes. You'd need to check First Direct's policy on that.

getmore4less

Fixed rate will have overpayment penalties during the fixed period.

If you can pay it off in 3y a tracker or offset may be a better option, the later giving you longer term access to cheap money(once 100% offset) for nothing and a lot more flexibility should the plan not work.