How long should the mortgage last?
The ‘standard’ term is 25 years, but you can choose a different term if it suits you and the lender agrees that you can afford it.
With a shorter term, you’ll have higher monthly payments but pay less in total (see table below).
With a longer term, you’ll pay less each month but more in total. Beware of making financial commitments that continue past your retirement age unless you’re sure you’ll be able to afford the payments.
Example of how term alters the cost of a repayment mortgage if interest is 6% a year.
Mortgage Term in Years
|
Monthly payment for a $175,540 loan |
Total amount you will repay including the amount borrowed |
10
|
$1,948.38 |
$233,805.96 |
15
|
$1,479.72 |
$266,349.22 |
20
|
$1,256.79 |
$301,630.75 |
25
|
$1,130.41 |
$339,123.96 |
30
|
$1,053.18 |
$379,144.80 |
How much can I afford?
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How long should the mortgage last?
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