35 or 40 year term?

[househunterin]

First time buyers. Mid 20s.

40 year term makes it £50 cheaper each month than 35 year term.

Which would you opt for? We can always remortgage later down the line when rates have stabilised, just looking to pay as little as possible at the moment.

40 year term just now but get into the habit of overpaying as soon as you can.

40 years, if your aim is to keep repayment as low as possible. But as PP said ensure you have the option to overpay if you want to.

35 definitely, £50 is no saving at all. Get as many years off your mortgage as possible.

If you’re really strapped for cash and the £50 per month will make a difference, go for the 40, but if you can afford the 35, then it’s best to do it.

Always start long, you can shorten as you get pay rises etc. do try and save to make overpayments though.

You absolutely do not want to get used to the smaller payments of a 40 year mortgage. It costs so much more..

For 50 quid, I would go for the 35 years

Thats bad enough, 10 years longer than a traditional term although I know they are getting longer and longer

But also think of the interest you're saving

Look at the difference in overall cost between paying it off in 15 years versus 40 years.

35 years.

Yeh I would go for the shorter term tbh. 35 years is still long. £50 pm saving is not loads really (I know for many it’s a significant sum of course). I’d look to cut that elsewhere rather than have five years’ more mortgage.

I know loads of ppl who pay about that for a phone for example. I would cut to £10 for the overall mortgage saving.

Why do you need such a long term and why do you want to pay as little as possible at the moment? Can you afford the repayments? Can you still afford them if the rate rises to 10%? Are over borrowing? As @DrySherry has pointed out very clearly, the longer the more you pay, by a very large margin!

I'd go for 35 years. The monthly difference isn't a lot but the overall interest paid probably will be significant.

Came here to say this. If you’re hesitating over £50 a month, can you afford the house you’re buying?

Yep agree with pp. if you can’t afford an extra £50pm then you can’t afford the house. I’m surprised you’ve got an agreement to borrow enough if you’re that strapped for cash, lenders normally stress test up to a much higher rate.

We can on paper afford much more (60k over what we’re buying) but I’m wondering if that money is better spent elsewhere.

Where else would it be better spent though? Unless you can find a savings account with a higher rate than your mortgage AND you can be certain that you’ll be sensible and save the money and not spend it unnecessarily, then there’s no point putting £50pm elsewhere only to end up with an extra 5 years on the mortgage!

If you have debts that need paying off then that’s a different matter.

OP do you understand that the longer the term, the more you pay overall?

I'd go for 35 years. I've never wanted a mortgage to run past my being 60 so wouldn't go for a term that took me beyond that date.

But much of that personal preference.

Go for 40 if thats what you feel more comfortable with now. It doesn’t mean you’ll be paying it for the next 40 years. Nobody can predict whats going to happen in the future/ how much you might earn / how your life will pan out.

i took a 25 year mortgageout in my 20’s it was a lot of money then and i fully expected to be broke for the next 25 years but it was paid off in 15 and never had another since. Do whats best for you now and see how things go 👍

Personally I would take the longest mortgage you can and then overpay to reduce the term. You haven't said what the rate is as you could be better off putting that £50 in a savings account earning more interest than your mortgage. This then also gives you a little flexibility when you have a big spend month like MOT/Tax/service/insurance on your car.

I took out a 25 year mortgage and paid it off in under 10 year doing this and then decided to do it all over again 😂

My DS went for a 40yr term and is overpaying. Seems the way to go.

I'd buy somewhere cheaper. 40 years in debt horrifies me. Although if it's cheaper than rent I can see why you might do it.

35 years. Interest rates are likely to stay at this level a while, so look at what you can cut that saves a tenner a week. Walking rather than bus/train/tube/taxi, takeaway, coffee out etc. Save in an ISA, pay off a lump sum. Paying more now means so much less wasted in interest over the term.

Do you mean spent on paying down debt or spent on something else?

Yes this is what I mean as well. Taking out a 40 year mortgage now keeps the monthly commitment as low as possible and allows overpayments if wanted. There is no requirement to actually keep the debt for 40 years, you will remortgage many multiple times in that time.