Longer Mortgage Term

jrsga

Hello

I need help on helping me make a decision as to whether to apply for a mortage term of 20 years or 22 years (22 years would take me to 65, retirement age).

Obviously extending the term reduces the monthly payment. As I see it its a lower monthly amount to "make". I intend to overpay religously on top of the monthly payment to reduce the debt but as I see it it just gives me more flexiblity?

Can anyone add anything perhaps that I am missing?

thanks

Thrugelmir

Overpaying requires personal discipline. Easy to say one is going to do it. Then doesn't. How secure is your job? Health also plays a part as one gets older.

While the amount to pay maybe lower now. An increase in interest rates will change the situation entirely. So clearing the debt as quickly as practically possible would be my first objective. As once gone then money could be put aside for retirement. Meaning that one wouldn't have to work until normal retirement age.

Typhoon2000

If you have the displine to over pay, then yes a longer terms makes plenty of sense in terms of flexibility. As Thrugelmir mentions, if you have a shorter term and loose your job you have a bigger monthly commitment than if you your term was longer. So I would apply over 22 yrs and aim to make payment as if it were a 20 year term, and then any overpayments on top.

amnblog

Does it make much difference?