Help needed pay more over less or less over more to begin with

FTB1986 · 19 April 2019 at 9:01AM

So as the title suggests I am in a predicament and not educated enough on mortgages to know which would be better so any help is greatly appreciated..

I have an offer for 30 years at a fixed fee for 2 years and will then be looking to remortgage. I wanted to know if its better to have the fixed fee for 2 years on a 35 year term to reduce monthly payments but allow me to over pay by the same amount I'd be paying if I took the 30 year option. I have a 95% ltv so looking to overpay over the next 2 years to get a really good rate on my remortgage.

What would be the best option in this scenario as my MB is useless (currently having offer resent out as got my partners surname wrong on application

) and I'd rather ask this forum

Thanks in advance

BikingBud · 19 April 2019 at 9:46AM

FTB1986 wrote: »

So as the title suggests I am in a predicament and not educated enough on mortgages to know which would be better so any help is greatly appreciated..

I have an offer for 30 years at a fixed fee for 2 years and will then be looking to remortgage. I wanted to know if its better to have the fixed fee for 2 years on a 35 year term to reduce monthly payments but allow me to over pay by the same amount I'd be paying if I took the 30 year option. I have a 95% ltv so looking to overpay over the next 2 years to get a really good rate on my remortgage.

What would be the best option in this scenario as my MB is useless (currently having offer resent out as got my partners surname wrong on application ) and I'd rather ask this forum

Thanks in advance

Wouldn't stretching to a 35 yr term suggest the property is unaffordable?

Negotiate a drop in the price.

300K*95% = 285 > 35 yrs @ 3.92% = 1314 per month = 551866 total
300K*95% = 285 > 30 yrs @ 3.92% = 1348 per month = 485108 total
280k*95% = 266 > 30 yrs @ 3.92% = 1258 per month = 452767 total
280k*95% = 266 > 25 yrs @ 3.92% = 1392 per month = 417697 total
280k*95% = 266 > 35 yrs @ 3.92% = 1165 per month = 489321 total

I know where I'd rather be as the potential £135k difference would come in very handy elsewhere.

FTB1986 · 19 April 2019 at 9:55AM

Thanks but my question is more around the nest option for next 2 years. Going to 35 years doesn't make it unaffordable it just means I can overpay more but I want to know if I will have a lower ltv in 2 years by overpaying on the 35 year fixed fee or paying just the amount on 30 year fixed fee meaning less chance of overpaying.

Not asking for lower price from sellers either so the price is the price.

Southernman · 19 April 2019 at 2:35PM

It would depend on how much you plan to overpay.

For example if you have a 35 year term but overpay the equivalent of a 30 year term monthly payment it will decrease accordingly

However if you only overpay £10 here and there it won't be the same as a 30 year term payment.

It all depends on how strict you are

Help needed pay more over less or less over more to begin with

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