On a £200,000 mortgage at 5% interest:
| Term | Monthly payment | Total interest paid |
|---|---|---|
| 20 years | £1,320 | £116,800 |
| 25 years | £1,169 | £150,700 |
| 30 years | £1,074 | £186,600 |
| 35 years | £1,010 | £224,200 |
- You are struggling to meet your current payments and need short term relief
- You need to pass an affordability assessment for a remortgage
- You are a first time buyer and need lower payments in the early years, with plans to overpay later
- Your income has changed (parental leave, career change) and you need flexibility
Yes, this is a smart strategy. Most lenders allow overpayments of up to 10% of the outstanding balance each year without an early repayment charge. By extending your term and then overpaying when you can, you get the safety net of lower minimum payments while still reducing the overall interest you pay.
Need to lower your payments?
We will model different term lengths and show you exactly how they affect your monthly costs and total interest.
Speak to us