Extend the term but over pay more?

3 Posts

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!
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!
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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!
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.
Mortgages (End 2017) - £180,235.03
(End 2021) - £131,215.25 DID IT!!!
(End 2022) - Target £116,213.81
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)