Brendan Hughes

Can someone help, I'm useless with these.

I want a mortgage of 330 000, and will pay it back at 5%.

If I get a 25 yr loan, it's cheaper at the end of the period, but I have to pay more each month. A 30 yr loan will allow me to have more disposable income each month, though I know I will pay more over the period.

The question is - just how much more would it finally cost me? Not needed to five decimal places, but just to make me think. 1000, 5 000, 10 000?

Many thanks

Brendan

what would scooby do

330,000 over 30 years is 1771.51 per month - total interest is 307744.73

what would scooby do

330,000 over 25 years at 5% is 1929.15 per month - total interest is 248743.30

I used an american calculator so it's probably all wrong

Brendan Hughes

Flippin heck, an extra 50 000?

Fast_Blue_Scooby

If you have a repayment mortgages then borrowing:

£330,000 over 25 years will cost you in total £578,744.14, ie £1929.15 a month

£330,000 over 30 years will be £637,744.09 in total, ie £1771.51 a month.

So even though you are 'saving' £157.64 a month taking on the 30 year option, it will cost you £58,999.95 more in the long run!

3times

330k @ 5% = 1375 pm interest only.
invest (or spunk) the rest offshore so as to defer any tax.
over 25/30 years you will get a higher return than 5%.

330k loan stays on property therefore any possible future IHT problem for the estate has been reduced/avoided.

unclebuck

don't forget to add the VAT [img]images/smilies/mad.gif[/img]

Brendan Hughes

Thanks all. Er, think I'm going to bite the bullet on the 25-yr loan then!

Kevin Greeley

Why not go flexible? Then you can pay back early or late depending on your future finances?

Brendan Hughes

I'm trying to Kevin, but banks don't offer those kind of products out here. I've got one as close as possible though.