How Long should I take a mortgage out for

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Bowsa
Bowsa Posts: 114 Forumite
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in Mortgages & endowments
Hi all,

I am getting mixed messages from friends and family.

currently looking to buy a house (1st time buyer) I am 30 my partner is 28.
so when looking at mortgages, I don't know how long I will get a mortgage for (40 being the longest, and I will certainly still be working by then imo) however I don't know if I would be accepted for that.

So really looking for whether I should go for the longest period possible to keep repayments as low as possible

or

Whether I should go for something like 25 years and get it paid off ASAP.......

and what the likely hood of getting an longer mortgage would be?

TIA
«1

Comments

  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    Longer term and overpay does the same as shorter term but gives the option to have the small payment.
  • Bowsa
    Bowsa Posts: 114 Forumite
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    Thanks for the reply, do you not get penalised for over paying?
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    most have some allowance(eg 10% of borrowing) and FTB tend to have high LTV so chose products that they can change in 2-5 years as the LTV improves the rate goes down so have the option to save and pay off lumps if they hit a penalty overpayment.

    in most cases it is not an issue
    £100k 4% over 25y £530pm 40y £420pm

    10% overpayment over £800pm well within the difference.
  • SeduLOUs
    SeduLOUs Posts: 2,171 Forumite
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    I personally opted for a long term deliberately to leave wiggle room for small payments if something happens and money gets tighter. I hope to take advantage of the fact I can overpay 10% without penalty to reduce the mortgage length in real terms but without committing myself to it and possibly overstretching myself if something goes wrong.
  • Boredatwrork
    Boredatwrork Posts: 2,068 Forumite
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    Check with your bank regarding over payment limits to be sure.

    Just don't fall into the trap a longer term with the intention of over payments, then spend the difference on cake. You need to try and stay committed.
  • amnblog
    amnblog Posts: 12,443 Forumite
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    edited 15 September 2017 at 10:14AM
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    Take a mortgage out for the shortest term you are certain you can afford.

    The longer you have a mortgage, the more it costs you overall - that is the plain fact.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Boredatwrork
    Boredatwrork Posts: 2,068 Forumite
    edited 15 September 2017 at 10:16AM
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    amnblog wrote: »
    Take a mortgage out for you shortest term you are certain you can afford.

    The longer you have a mortgage, the more it costs you overall - that is the plain fact.

    Yes but it can countered by over payments.

    When it boils down to the variables there are really 2 factors involved in maximising the overall savings

    1. The amount you pay (be it via regular payments or over payments, it doesn't matter)
    2 The quicker the payment is made (based on many mortgages interest being calculated daily)

    The term just reduces/increases the amount you pay, and the difference can be made up (and increased) by over payments.

    I am sure you know this.
  • amnblog
    amnblog Posts: 12,443 Forumite
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    Boredatwrork wrote: »
    I am sure you know this.

    I would hope so.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Boredatwrork
    Boredatwrork Posts: 2,068 Forumite
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    amnblog wrote: »
    I would hope so.

    Me too, it says Mortgage Broker in your signature.:rotfl:
  • kingstreet
    kingstreet Posts: 38,764 Forumite
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    As a broker you get to see more of human nature.

    Some clients consolidate debt on a regular basis, despite promising every time they won't continue to use their homes like a cash machine and use debt to live outside their means.

    We would use the shortest term which meets lender affordability. If the client wants a longer term, that's their choice. The facility to overpay is important, but in reality many people will prioritise everything else ahead of it, kids, holidays, cars etc) until they are in their 50s when everything else has dropped away...
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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