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Mortgage terms
Mortgage Terms:
What is the Best Length?

What length mortgage to choose can be a difficult decision especially these days when there are more options than ever available on the market.

Simply put, your mortgage term or mortgage length is the length of time you have agreed to pay back the money, including the interest accrued, that you have borrowed from your mortgage lender to purchase your home or property. For most people, repayments are usually made on a monthly basis.

What length mortgage is typical?


There is no easy answer to the question of what length mortgage is best. but traditionally, an average mortgage length lasts a period of 25 years. However, this mortgage term can be longer or shorter.

Mortgage lengths have been stretched over the recent years. Nowadays, there are several lenders who are known to offer mortgage terms of 40 years or more.

What length mortgage is best?

Many borrowers will be attracted to long mortgage terms. The obvious advantage of a loan of this mortgage length is that your monthly repayments will be comparatively low. However, as you are repaying the loan over a much longer period, you may end up paying more in interest. Longer mortgage terms may seem very tempting, but they will not be so appealing when you have to make repayments in your retirement years!

It is best not to decide on what length mortgage to go for simply by choosing the longest mortgage term offered to you. The shorter the mortgage term you choose, the higher the monthly repayments, but the benefit is that you will be free from debt faster!

Different mortgage lengths will appeal to different borrowers depending on their individual needs. It is up to you to decide what mortgage length best suits your needs, but here are some key points to consider:

  • Short Term Deals: Mortgage terms which last for 2 years or less tend to offer the biggest discounts. You might be attracted to short mortgage lengths if you are lacking in money, but they are not normally such a good deal in the long term. They usually come with an extended redemption penalty that ties you to the lender's standard variable rate for several years after the special deal has ended. Your initial early savings are usually cancelled out.

  • Long Term Deals: Fixed mortgage terms which last more than 10 years will offer you more certainty and stability around your regular repayments. You will gain if interest rates rise over this period. However, if they fall, you could end up unfortunately paying more than you should..

  • Medium Term Deals: When deciding what length mortgage to take up, the majority of borrowers opt for medium term mortgage terms of between 2 to 5 years. Medium-term mortgages offer borrowers a good balance between stability and flexibility.
To re-iterate, if you choose a shorter term mortgage, you may have to face the cost of remortgaging to avoid paying you lender's standard variable rate sooner. If you choose a longer term mortgage, you may not have to remortgage quite as often, but you will be tied down for a longer period.

Ultimately, choosing what length mortgage is entirely a matter of personal choice; there is no right or wrong option. There is only a mortgage length or mortgage term which suits your circumstances and budget.


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