Mortgage Over 35 Years.

vikki05_08

In 2006 me and my partner took a 10 year fixed rate 4.99% mortgage for over 35 years.

At the time it sounded like a really good deal we were getting, but now we are starting to think after the 10 years we are going to still have a mortgage for 25 years.

The mortgage is 740 a month and we will find it difficult to increase it as at the moment I am studying. In 3-4 years time I will be earning a wage and we will be able to increase the mortgage, we was thinking about getting an interests only until this happens?

Any advice will be most appreciated.

maninthestreet

4.99% is a good deal - you'll struggle to beat that in today's market.
I suggest you wait until you are earning a wage, before looking for a new mortgage deal. Are there any early RPCs for your current deal?

u109230

I also agree that 4.99% is a good deal in todays financial climate.

Once you start earning could you overpay to bring down the mortgage term?

UK007BullDog

If you can afford to keep paying the mortgage now then keep it up.

Once you have your extra income start overpaying to reduce the mortgage quicker and in your case I would opt for reduction of years. Once your current deal finishes you are at 25 years where most people would be at 15 years left to pay.

Once your deal finishes visit a broker to find you the best deal and how to shorten the 25 years.

But if you reduce the repayments by only going interest only (its like paying rent) you are not gaining anything except having more money in your pocket per month. But you would still owe the money further down the line. (Read some of the posts of people wanting to go interest only with the pros and cons involved.

So to repeat: Keep paying as you are now unless you are in total financial hardship. Once your income increases start paying extra towards the mortgage (find out if the lender allows this, if not put the money in an ISA and once the time comes to remortgage put the savings down to reduce the mortgage in years, don't be fooled by lower monthly payments as your goal is to reduce the years). Use a broker to find you the best deal when the 10 year deal expires.

vikki05_08

Maxium ERC is £7236.

I will be able to make extra payments to bring mortgage down when im earning, would this be best to do if put in saving acc and wait untill fixed rate ends??

Thanks for tips so far.

vikki05_08

Thank you for that Uk007bulldog.

The rate is good and we can afford to pay i'll guess i'll just have to wait till 2016 to see what happpens.