Extend the term but over pay more?

Hello,

My Wife and I are about to apply for a new mortgage as our current 2 year deal is coming to end. We have been able to over pay by a couple of hundred of a month for the past 6 months and intend to to keep doing so while we can afford it.

My question is.. Is it better (in terms of paying off the mortgage quicker) to take a 23 year mortgage and carry on over paying like before OR take another 25 year mortgage with a lower monthly amount but then be able to over pay more a month?


In summary, is it a good idea to extend the term of a mortgage by a few years to get a lower monthly payment then over pay by a larger amount?

I hope that make sense!

Thanks in advance!

Replies

  • A_Frayed_KnotA_Frayed_Knot Forumite
    3.3K Posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
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    Works out the same, but depending on your mortgage total, may be restricted to total o/p's in the year.
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
  • jollyjacko1979jollyjacko1979 Forumite
    3 Posts
    Sixth Anniversary First Post Combo Breaker
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    Thanks for the reply,..

    I am not so sure though, I have been trying to use the MSE over pay calculator and I think extended to 25 but overpaying more would pay it off a little quicker but would cost more?

    It's all a bit confusing!
  • pollyanna24pollyanna24 Forumite
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    I agree with the other person who replied to you. It makes no difference.

    The more a monthly payment you can make will make the mortgage go quicker, not whether more or less of that payment is the regular monthly payment as opposed to it being an overpayment.
    Pink Sproglettes born 2008 and 2010
    Mortgages (End 2017) - £180,235.03
    (End 2021) - £131,215.25 DID IT!!!
    (End 2022) - Target £116,213.81
  • A_Frayed_KnotA_Frayed_Knot Forumite
    3.3K Posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
    Forumite
    Thanks for the reply,..

    I am not so sure though, I have been trying to use the MSE over pay calculator and I think extended to 25 but overpaying more would pay it off a little quicker but would cost more?

    It's all a bit confusing!

    You might o/p more but you would be paying less mortgage

    example -
    a)Mortgage payment 400.00 plus o/p 200.00 = 600.00 per month OR

    b)Mortgage payment of 200.00 plus o/p of 400.00 = 600.00 per month

    Which pays the bill/mortgage quicker - a) or b) :)
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
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