The mortgage term is the length of the entire mortgage. Many people get this confused with the product term, for example, a two or five-year fixed rate. Many first-time buyers seem to be under the impression that you can only get a 25-year mortgage term which isn't correct. You can go from a two-year term up to a 40-year term in monthly intervals, depending on which lender you have your mortgage with
Many first-time buyers seem to be under the impression that you can only have a 25-year mortgage term, which is incorrect. You can have complete flexibility when choosing the term for your first mortgage. It varies from two years up to 40 years and in monthly intervals. However, many lenders will cap the maximum term up to 35, meaning when you choose a term over 40 years, it will cut many lenders out of the market for you.
If you choose a longer mortgage term, the monthly repayments will be cheaper for you. However, you will be paying a lot more interest in the long run as the mortgage is being repaid over a longer-term.
Every time you remortgage, you can reassess your mortgage term; for example, if you get your first mortgage and take a 35-year term out over a five-year fixed rate when you go to remortgage, there are only 30 years left on your mortgage at that point.
You may have had pay rises when you need to review your term. However, your income may have increased you may be able to afford a lot more for your monthly repayments.
If that is the case, what you can then do when it is time to remortgage is rather than keeping the term at 30 years, you might be able to reduce the term of your mortgage and get it paid off quicker, which will save you a lot of interest in the long run.
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