Your Property - Term of your mortgage

Deciding to opt for a 25 year mortgage, just because everyone else does, is not necessarily the best option for everyone. It is important to remember that your mortgage is possibly your biggest ‘debt’ and, as such, you should aim to get rid of it as quickly as possible.

The first step is to set yourself a realistic monthly budget. Ask yourself how much you could comfortably afford to set aside to cover your monthly mortgage payments and associated protection. If this amount allows you to have a shorter term on your mortgage, go for that rather that the 25 year option. If you have decided to opt for a repayment mortgage, although this will mean higher monthly repayments, remember that it will be for a shorter time and you will save money in the long run.

On the other hand, if your budget is too tight for a 25 year term, go for a longer term to ensure that you can afford the payments. There is no point stretching yourself to pay the mortgage if something else will suffer. You always have the option of reducing the term later when your affordability improves.

You should also take into account any specific goals you have set yourself. The most common of these is retirement. If your 42 birthday is around the corner and you want to retire at 65, do you really want to be paying a mortgage from your pension. Try and make sure the longest term you decide to go for is 23 years so your mortgage is cleared by your retirement date. It is important for you to ensure that you can afford the mortgage for the whole term, not just for the initial period.

The above advice was produced by Mr Manish Patel (BA hons), if you require any further information or have any questions regarding financial advice, please feel free to contact him. Email financial advisor

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