There is an ideal solution but it depends on your personal discipline:

1. Take the mortgage over a longer term so that your committed payments are lower e.g. 20 years.

2. Find out how much you would need to pay over a short term e.g. 13 years, and pay this amount.

You would need to ensure that the mortgage lender is happy with this - most of the mainstream lenders will allow you to overpay 10% of the total mortgage balance each year i.e. a maximum of £15,000 in the first year - so you should be OK

So for example, if 20 years costs you £500 per month and 13 years costs £700 per month, pay £700. This will have the effect of reducing the term to 13 years while at the same time giving you the flexibility to make the lower payments if times get tough. As I said, the key factor is "personal discipline".

Another thing to do is to review the level of life cover, etc. associated with your mortgage. If you change the term, you may need to change the term of your policy. Also, reviewing your insurances may save you some money that you can throw at the mortgage.

Hi Both,

Thank you for your replies.

Our house is worth approx 220k and we have approx 150k mortgage to pay and a remaining term of 14 years.

We would like to pay this off the quickest way possible, we spoke to an FA last night and I wondered how much extra it would be per month if we cut the term down to 13 years and my wife wondered if instead of reducing the term, how about if we extended the term and paid less on a variable rate and whist those rates are low then make an overpayment (as we've been on a fixed rate at about 4.9% for the past 3 years) and we wondered which would be the best option, however its difficult to illustrate isn't it?

Would achieve anything by doing this? Apart from a safety net of not having to worry about meeting the higher mortgage payments required if we were to lose our jobs and took a lower paying job if we were to opt for extending the period and making a cxconsious effort/standing order each month into a seperate account and paying a lump overpayment at the end of each year?

Simply put.

You will pay far more interest on your mortgage over a 20 year period than you would over a 14 year period.

To illustrate this i have just quoted some basic figures from my own website:

Total to pay on a £100,000 mortgage over 25 years at 4.75% throughout = £171,191
Total to pay on a £100,000 mortgage over 30 years at 4.75% throughout = £187,949
Total to pay on a £100,000 mortgage over 35 years at 4.75% throughout = £205,476
Total to pay on a £100,000 mortgage over 40 years at 4.75% throughout = £226,251

While the figures don't match your own you can clearly see the difference in taking a longer term on a mortgage and what will be repaid. The difference in figures between the highest and lowest repayment figure is purely interest paid to the lender (profit)

Why would you want to reduce your monthly payment and then make an over payment? If you are comfortable with you current payment then stay with the same term, if you extend your term you are likely to find a comfort zone with a lower payment and overpayments will fall by the way side and you will end up paying considerably more for your mortgage.

Go and speak to a mortgage broker and have this discussion, He/she will be better able to illustrate this to you in full and offer you ideas and solutions that can move you in what ever direction you choose.

If you want to save youself money you will decide NOT to extend your mortgage

Good Luck

What you are proposing looks possible, subject to your income, credit score and loan to value (amount borrowed as a percentage of the value of the property). More info would be required to decide upon the best way forward.

Hello all, first post here, We are at the end of our fixed rate and looking for a new deal, we have 14 hears left on mortgage, would like it gone ad quick as possible, my wife is thinking of extending the term to say 20 years, reducing the monthly payment, but then making substantial overpayments, would this pay more capital off quicker than remaining at the 14 years? It's very hard to illustrate isn't it?