What is term?
The term of a mortgage is the time period over which you repay the mortgage loan. For example, you will hear people talk about a 25-year term. In general, the term of your mortgage should go up to your intended retirement age so your mortgage is repaid in full, and you can retire without the continued payments of the loan. The term of the mortgage will affect the monthly repayment figure. The longer your term the smaller the monthly payments are because you are paying it over a longer period so therefore the shorter the term the higher your monthly repayments are, but the loan is paid off quicker.
When you take out your first mortgage, you may find that you can take out a 40-year term mortgage. I personally believe that the term isn’t something to get too hung up on. This is your first mortgage and if you take it out over 40 years you won’t be keeping this exact mortgage for that time. You will remortgage a number of times and may even sell the property and buy something else. During which, you can change the term to suit your circumstance. Stretching the term and not worrying about when your mortgage will be paid off could potentially offer you lower monthly payments meaning you can just get used to owning a house knowing that you can comfortable afford to pay your mortgage.
