The Sun - mortgage terms

ended 17. August 2021

A journalist at The Sun is seeking brokers to explain what a mortgage term is — and how to pick the right one for you? What length term is more suitable for people with poor credit scores/low incomes/smaller or larger deposits, for example? Please keep your alert_responses to 2 sentences max! Short and sweet best.

9 responses from the Newspage community

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Thomas Honour
Director at Thomas Honour Mortgage Services
"A mortgage term is simply the number of years you will repay your mortgage over. There is no right or wrong when it comes to the length of term. Some borrowers will suit shorter terms and others longer terms, it depends on factors such as future increases or decreases in income, life plans such as having kids, and your preferred retirement age."
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Lewis Shaw
Founder & Mortgage Expert at Shaw Financial Services
The mortgage term refers to the total length of a mortgage eg 25 years/35 years. The initial product refers to it being a 2/3/5/7/10 year deal whether that's fixed or variable. Depending on the monthly budget you have available for mortgage payments, you should tailor the term to what you can afford and that will dictate the length of the overall mortgage, ideallt the shorter the better as this resuls in less interest oayable overall. You would not have a 'more suitable' term if you have bad credit, it's always budget based.
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Rhys Schofield
Managing Director at Peak Money
One of the best ways to save huge amounts over the length of your mortgages is to pay it quicker and not pay more interest than you have to. Often this can save more money than any amount of shopping around for the best deal! The 'right' term should really be as short as possible but where you can comfortably afford the monthly repayments with a bit of wiggle room for a rainy day. Plus if you have any spare money most lenders let you overpay up to 10% of the mortgage balance each year too. A great idea when savings accounts are paying you naff all in interest each month!
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Paul Neal
Mortgage & Equity Release Specialist at Missing Element Mortgage Services
The term of a mortgage is simple, its how long you want to pay the mortgage over, don't mix this up with the product term which is the period that deal lasts over. We will always advise to have the shortest term which you can afford, this in the long run will save you cash on interest, however usually the longer the term brings with it lower payments. The main factors when looking at the term of a mortgage is irrelevant of credit, deposits etc, its how long can you afford the mortgage for? Do you want it paid off by the time you retire (we always advise this) Can you afford it after you retire? A mortgage is one of the biggest financial burdens we will have, the less time its there the better it is for you. But dont forget, some lenders will allow you to "overpay" your mortgage, which again will save you £££ in interest over the mortgage period.
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Imran Hussain
Director at Harmony Financial Services
A Mortgage term is simply how long you have your mortgage for and the most suitable one is purely down to your individual circumstances and preference. If you want a lower monthly payment you go for a longer term initially or if you happy to pay more per month go for the shortest term affordable.
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Doug Miller
Director at Lansdown Financial Services
Put simply, the mortgage term is the length of time it will take to clear your repayment mortgage in full. There is right or wrong answer as to what is the most suitable term, but the key thing to remember is that the longer the mortgage term, the more interest you will pay. A very general rule of thumb is that your mortgage payment should be no more than 28 - 35% of your monthly gross income. Anything higher than this and you are starting to overstretch yourself. However, no one wants to be paying a mortgage into their retirement so the best advice I can give is to go for the shortest mortgage term you feel comfortable with against your budget and look to overpay on your mortgage whenever you can.
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Mark Dyason
Owner at Edinburgh Mortgage Advice
The best mortgage term for you is one that balances up the different priorities that influence what you want to afford each month. The faster you pay the less, but spending too much free income on just the mortgage isn't a good idea either, there so much more to life than making mortgage payments! Also you are not wed to this term, review each and everytime your rate finishes as your priorites and life situation will change as you get older.
Joe Stallard
Director and Advisor at House and Holiday Home Mortgages
A mortgage term is the overall amount of time that you will take to pay off your mortgage, when looking at repayment mortgage options. This could be anything typically from 5-40 years. The term affects how much your monthly payments are; the shorter the term, the more you pay each month. Crucially, if you choose a longer term then the monthly payments may be lower, but you'll also end up paying more in interest as you'll have the loan for longer. Generally, it's a good idea to try and opt for as short a term as possible, whilst ensuring that you can comfortably maintain your monthly payments. A good broker or advisor can work with you to come up with the right solution for your individual circumstances.
Iain Swatton
Head of Intermediaries at Dashly.com
"The longer the mortgage term, the cheaper the payments. "Beware though - spreading payments means you'll pay more interest on your mortgage overall, so it's crucial to balance this against monthly affordability, and to budget effectively. "Those with lower credit scores should consider their disposable income and any other outgoings, as well as their financial standing - and don't over commit."