If you possibly can, I think it's wise to take out a 15 year mortgage instead of 30. There's not that much of a difference in the payments and you save so much in interest. Obviously, not everyone can afford it so just compare the numbers and see if you can. If you can't and eventually increase your income, you can always pay extra principal monthly and that acts as a 15 year mortgage.

I'm not sure that there isn't much difference in payments - basic impression so far is that there can be a pretty huge difference in repayments.

Even still, I think it's definnitely a good point to work on affordability - if you can reduce the term of repayments, you can only save money from it.

For myself, my current plan is to probably go for a 25 year span - but to put extra aside a repayment reserve - that way, if something happens to my business, I can cover unemployment for a while, and if that doesn't happen, simply use the money to repay the mortgage faster when it feels safest to.

2c.

It depends how you define huge. For example: The difference between a 15 and 30 year mortgage on a principal amount of $100,000 and a difference in 1% interest is $290 a month - not a little by any means but if you could somehow squeeze out the payment, it saves you a ton of interest.

I just tried to mortgage calculator here:
http://www.bbc.co.uk/homes/property/...lculator.shtml

Reducing from 25 years to 15 raises the costs about a third, which I guess is fine if you can budget for it - but I guess a big concern is that people are looking to borrow as much as they can.

As a first time buyer, I'm probably looking for £200,000 if possible, which would mean repayments of £1200 or £1600 a month at 5%, for 25 and 15 years respectively.

The savings are definitely there if you reduce the term, though.

Most people who take on a mortgage right now go for the biggest possible amount of money. It's all too easy and banks are of course very eager to offer the option of bowwing over.

I think that's true that people will try and stretch as far as possible with a mortgage so that means least payments over longer time for the nicer house.

I think it's really a question of what you can afford without overstretching yourself.

But I agree the ideal is to pay a mortgage off over as short a period as possible.

It depends on your financial status, if you cant afford the 15 year one, go for the thirty, just work your way up....eventually you can re finance and possibly change the terms....

I agree with W. Harbaugh. 15 years or the shorter term is always best as the interest is also less , however, it depends on the amortization, the affordability.

Okay, now that I'm lining up for a mortgage I've been looking into this issue.

What I'm going to do is opt for a 30 year term - that's so that my initial repayments are relatively cheaper (about £150-£200 cheaper a month) because I'm running a relatively new business and terrified of the risks - any set-backs in the business would throw me into the really deep end, rather than just deep end. Hence the longer payment term.

However, I also plan to set aside Dividend payments from my business to pay extra into the mortgage repayments every year.

*If* I'm able to keep really disciplined on this, I could see my motgage paid off at the current rate at anywhere between 8-12 years.

The term simply gives me a greater level of security to make initial repayments after a big jump.

It's also worth looking at whether there are any overpayment fees on a mortgage you're considering - the one I have allows a maximum of 25% paid off each year, but I very much doubt I'll be as high as that - more likely around 6% if I can.

While it obvious the 15 year mortgage would save you a considerable amount in the long run, the payments are a lot more. When most people consider purchasing, they atomatically think of how much house they can afford based on a 30 year mortgage. I think it would be wise to consider on the 15 yr. mortgage and base how much house you can afford from that.

When my husband and I signed the mortgage papers, we didn't thing "hey we are going to be in debt until after the kids get out of college." Thirty year mortgages have become so standard that people DON'T think about that.

Even though we only recently refinanced that same 30 yr mortgage, I'm trying to figure out a way for us to re-refinance into a shorter term (10 years or so). If we had done that to begin with, we'd be debt free today.

I suggest you start with something that you can pay off in 5 or 10 years at the most. You can always move up from there.

If I have the opportunity and the cash then I would definately would choose the 15 year option.

I've been trying to pay off my mortgage more quickly - started well with the first quarterly payment, but then got hit with a big tax bill for this quarter, and more tax due next quarter!

I'm going to have to really push to keep any kind of momentum...

I have read that unless you want to build up equity faster, remortgaging is not always a good option but the best way to shortening the mortgage term.

You can save alot of money on interested, IF you can afford the monthly payments, definately worth it.

That's the crux - affordability.

Got to admit, I made a big mistake when taking out my mortgage that I didn;t factor into account the fact that I started on a discount rate, and that this would go up after two years.

However, in real terms I could actually afford a mortgage higher than I could actually get a credit to borrow for, so I can still make those overpayments as required.

Then when the discount rate falls away, I'll be paying pretty much the same anyway because of the overpayments.

I have friends with 35 year mortgages - scary. Ours is about 17 years and every time we move our mortgage and remortgage we make is shorter to get rid of it quicker.