overpayment or reduce term

hi - about to take out a new variable rate mortgage. Trying to decide if we should borrow over 25 years and overpay each month ( which we can afford to do ) or borrow over 20 years and not overpay. The repayment amount in both cases would be the same. Is there any difference / value in choosing either?? Thanks

I can't comment on a value perspective, but if you overpay, you always have the option of reducing to the "normal" payment should your circumstances change, which could relieve financial pressure in the future

From a very rough calculation it works out the same either way (so your repayment reduces the term of the mortgage and the cost of the mortgage to what it would have been if you had taken the shorter term). As Mpsox says it does give you flexibility.

(BTW I used Karl Jeacle's mortgage calculator with an example of a principal of 100k, interest rate of 3% and an overpayment of 80.39 - which matches the difference in repayments).

We do something similar..........take the longer term and overpay each month which shortens the term but gives you the flexibility of reducing the payments should you need to in the future