Q - Pay more monthly to pay off mortgage or lower monthly to have more disposable inc

mike_sedge

Hi there

Probably been asked before but what are peoples suggests for the below;

We are looking to remortgage soon and trying to decide shall we.

A - increase our monthly payments (still affordable) and pay off our mortgage in 8-10 years

B - lower the monthly payment leaving the mortgage term at 25 years so we have more disposable income

Thanks

LC21

Hi -

We remortgaged and set our term to much longer than we needed.

We overpay every month by a huge amount (can go up to 10% of outstanding balance per year), effectively reducing the term...but if we have an emergency we can stop the overpayments immediately and reduce down to the (very affordable) basic payment.

We did it because my husband was feeling trapped in his job. This way he knows that he can walk out of there with nothing to go to, and we can afford the house on just my salary. But you could look to do something similar, if less drastic, to give you flexibility, if you're struggling to decide between A and B!

LC

LC21

In case you're new to mortgages - a quick note to say that with all of the ones I have had, we could change the monthly payment immediately with one phone call. In fact, I just did that today. With one mortgage, we even took a payment holiday when we had our first baby.

Farel01

What kind of mortgage are you on?

Because I'm pretty sure I couldn't do that on my fixed rate.