First Time Buyer help!!

Mcolbs12

Hi

I have just applied for my first mortgage and upon reading through my Decision in Principle I noticed some small print that confuses me!

The total mortgage loan is £126,945 over 40 years (due to low income) underneath this it says ' Total Amount to be repaid: £248,639. Does this mean that if we choose to sell after say 10 years we have to repay the higher figure or is it what we haven't paid off the original mortgage loan?

It seems stupid if we have to pay off the higher amount because our house probably would never gain over £100,000 in 40 years.

Any help would be great

Thanks!!!

ACG

It means if interest rates remain the same and you make all of your payments on time and no overpayments, in 40 years you would have paid £248k.

However, interest rates will not remain the same and like you say, you may move in 10 years. In 10 years you would just pay whatever it is you have paid to date, plus any other charges that are due depending on the deal you have at the time.

User1489

No.

If you stick to your regular repayments and don't borrow any more, the mortgage will never go over the original amount you borrowed.

You repay more in total because of the interest applied each month, but your regular payment will be more than the interest each month.

in an example month;
Opening balance - (100,000)
Interest from last month - (500)
Regular Payment - 800
Closing Balance - (99,700)

Across every month, if you add all the interest and the original mortgage amount, this makes up your 248k.

Mcolbs12

Ahh that makes more sense! Thankyou both.

I knew having more to pay off didn't make sense but when I saw that huge amount it worried me! Otherwise we would all be in deep !!!!.

Thanks so much again