Extend an already reduced mortgage term.

I

Interest%

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Is there any advantage in increasing an already reduced term when switching mortgage providers. Say i had a 30 year term. Over paid for the year knocking a bit off the capital. 29 years left. Go to switch and the new provider approves a 30 year term.
What are the pros and cons.
Thanks
 
Pro - lower repayment each month (help with cash flow)

Con - Larger total repayment

eg. 300k mortgage at 2.6%
term______monthly_____________total
29 yr______1228.42_____________427,489.96
30 yr______1201.02_____________432,366.89
 
So over the 29 year term you will pay €9,535 more compared to 29years out of 30 year term. Then on the last year of the the 30 year term you will pay €14,412 for the last year.
So €14,412 - €9535 = €4,877.
Or 432,366 - 427,489 = €4,877.

I see what you mean. You have a lower money repayment for the 29 years but that extra year will cost you an extra €4,877.
Thay extra is interest i take it?
Longer term and overpay when you can??
 
Oh sssuger thats true. About an extra 300 euro just did a quote. So would one advice it or go against it. Intial term was 30 years, im at 29years now.
 
I think longer term and overpay is a good blend. It keeps your minimum payment lower but you can do ad hoc payments.

With the ad hoc payment, use it to lower your contractual repayment rather than lower the term. (this gives greater flexibility)
 
Thank you hollow night. I dont know why i didnt go for the max term from the get go. In my naivety i choose 30years. Im 35 what is the max term i can get.
 
So i have 29 years left now on the mortgage and switching soon and they approved a 30 year, I'm still unsure should I keep the 29year or take the 30 year. Current age 37.
According to karls mortgage calculator-If I have the same rate 2.15% over the next 30 years I will pay an extra in interest.
So the extra year of mortgage gives me a lower repayment each month but an increase in interest paid which works out at €3,533.48 extra over 30 years. which is €117.78 extra per year or €9.8 per month.

Pros- Lower repayment each month- More cashflow for other things.
If one of us die within the next 30 years the mortgage is paid off anyway so why anyone take a short term and be struggling while we are living.
I'm thinking take the long term (less money out each month) and enjoy life while we are alive- Longest term and overpay when we can not when we have to.


Cons- More interest
Total figures 29yrs 2.15%
Monthly repayment €1,051.11
Total interest€93,787.01

Total figures 30yrs 2.15%
Monthly repayment€1,025.89
Total interest€97,320.49
 
The general advice would be to take as long a contractual mortgage as you can get but overpay and reduce it was quickly as possible.

But you're not talking about 5-10 years, you're talking 12 months. In the greater scheme of things is the 25 quid going to be the difference between defaulting and not or make that much difference to your day to day life?
 
skrooge said:
The general advice would be to take as long a contractual mortgage as you can get but overpay and reduce it was quickly as possible.

But you're not talking about 5-10 years, you're talking 12 months. In the greater scheme of things is the 25 quid going to be the difference between defaulting and not or make that much difference to your day to day life?
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Thanks, Is that for or against the 30 year or pro or against the 29 Year.
Thanks
 
Surely the difference between a 29 and a 30 year term is hardly worth worrying about? Especially if the plan is to continue accelerated repayment so that the effective term will probably be a lot less than either term? If I was in your shoes I'd just stick with the existing term (29 years remaining), not have the hassle of having to put new life insurance in place and maybe cancel the old one, and then continue accelerating repayments if/when possible where the money isn't needed for higher priority purposes such as enjoying living, pension contributions, paying down higher cost debts etc.
 
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ClubMan said:
Surely the difference between a 29 and a 30 year term is hardly worth worrying about? Especially if the plan is to continue accelerated repayment so that the effective term will probably be a lot less than either term? If I was in your shoes I'd just stick with the existing term (29 years remaining), not have the hassle of having to put new life insurance in place and maybe cancel the old one, and then continue accelerating repayments if/when possible where the money isn't needed for higher priority purposes such as enjoying living, pension contributions, paying down higher cost debts etc.
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Thank you, Re the life insurance- I have Convertible Mortgage protection insurance only for the mortgage so i can extend it without having to do another medical questionnaire.
 
Interest% said:
Thank you, Re the life insurance- I have Convertible Mortgage protection insurance only for the mortgage so i can extend it without having to do another medical questionnaire.
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Yes, but it will cost you more.
It's not really clear what your priorities are here.
Minimising the monthly mortgage and related payments (which would mean taking the longest possible term) versus minimising the total cost of the mortgage (which would mean taking the shortest possible term - from the outset or by accelerating repayments)?
 
ClubMan said:
Yes, but it will cost you more.
It's not really clear what your priorities are here.
Minimising the monthly mortgage and related payments (which would mean taking the longest possible term) versus minimising the total cost of the mortgage (which would mean taking the shortest possible term - from the outset or by accelerating repayments)?
Click to expand...
Il stick with 29, iv already overpaid by about 7k in the first Year.
 
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