17 years or 25 years

cornishfairy

Hi, I currently have 17 years left on an interest only with NR. Am changing to Halifax and was looking to extend term to 25 years so whilst I am not earning very much (baby) we can afford the lower payments. This is fine and I have been offered the mortgage which on a £163k loan, payments are £782 on a 10 yr fixed of 5.79%. Can anyoune tell me how much my payments would be if I remained at 5.79& on £163k but stayed for 17 years rather than extend to 25 years. I am just trying to work out if I am crazy to extend the term as the last 8 years of mortgage payments will have been for nothing BUT I do not want to be unable to afford the payments. Thanks

jonathon_hart

Sure someone who can do the maths will be along shortly. Can you overpay on the mortgage? If so could you put it to 25 years then overpay as and when you can?

beecher

http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=mortgage_calculator

is a good tool to use.

I am maybe not understanding properly, but surely interest only payments are the same regardless of the term? So you'd be paying the same whether you were extending the term or not? The issue is surely how you're going to pay the £163,000 back, not how you'll pay the interest so maybe you should see how much the repayment mortgage would be over the same time.

danm

payment will be £1,257

Treadmill

As you are only paying the interest and the balance is remaining the same your monthly payments will be the same for 17 or 25 years.

cornishfairy

How embarrassing I feel so thick!! Of course the interest payments will be the same. Just glad I asked on here rather than in the bank!! Yes I am able to overpay and this is what I plan to do once a year by saving into an ISA each month and then overpaying. Thanks everyone

danm

danm wrote: »

payment will be £1,257

that'll teach me to read the whole question