How It Works
Your mortgage term affects your monthly payments and the total interest you pay. We help you find the right balance between affordability and long term cost.
Your mortgage lifespan
The overall mortgage term is the total length of time over which your mortgage runs, typically anywhere from 5 to 40 years. The term you choose directly affects your monthly payments and the total amount of interest you pay. Longer terms mean lower monthly payments, but more interest paid overall.
Choosing the right term is a balancing act between affordability today and the total cost of your borrowing. Our advisors help you find the right number for your circumstances.
The numbers explained
The difference in monthly payments between a 20-year and 30-year term can be significant, but so is the difference in total interest paid. Here’s a simplified illustration:
Higher monthly payments, but you pay significantly less interest overall. You build equity faster and own your home sooner. Best if you can comfortably afford the higher payments.
The traditional mortgage term. Balances monthly affordability with reasonable total interest. Still the most common term chosen by buyers.
Lower monthly payments improve affordability but you pay substantially more interest over the life of the loan. Useful to stretch affordability, but consider overpaying when able.
Reducing your term
Many lenders allow overpayments of up to 10% of the outstanding balance per year without triggering an early repayment charge. Regular overpayments can significantly reduce the total term and interest paid, even small overpayments have a compounding effect over time.
See how much you could save by overpayingAge considerations
Most lenders set a maximum age at the end of your mortgage term, typically 70 or 75, though some lenders extend to 80 or beyond. This can limit how long a term you can take, particularly if you’re borrowing later in life. We’ll identify lenders with the most suitable maximum age policies for your situation.
Discuss your ideal term with usOur advisors will run the numbers with you and help you choose the right term for your situation.
Book your free call todayYour home may be repossessed if you do not keep up repayments on your mortgage.