Repayment Mortgage
A mortgage where monthly payments repay interest and capital.
Read term →What is Mortgage Term?
A mortgage term is the length of time the mortgage is scheduled to run, usually measured in years.
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Definition
A mortgage term is the length of time over which a mortgage is scheduled to be repaid.
Mortgage term in plain English
The mortgage term is the full repayment period for the mortgage. If you take a 25-year mortgage, the lender calculates the monthly payment so the loan is scheduled to be repaid over 25 years.
The mortgage term is not the same as a fixed-rate period. A mortgage can have a 25-year term but a two-year fixed-rate deal. After two years, the deal changes, but the mortgage can still have many years left to run.
How the mortgage term works
The term affects how the loan is spread out. A longer term spreads repayment over more months, which usually lowers the monthly payment. A shorter term spreads repayment over fewer months, which usually increases the monthly payment.
Longer mortgage term:
lower monthly payment
more months of interest
Shorter mortgage term:
higher monthly payment
fewer months of interest
This is why a longer mortgage term can improve short-term affordability but may increase the total interest paid over the life of the mortgage.
Mortgage term example
On a £250,000 repayment mortgage at 5%, changing the term changes both the monthly payment and the total interest.
| Mortgage term | Estimated monthly payment | Estimated total interest |
|---|---|---|
| 20 years | About £1,650 | About £146,000 |
| 25 years | About £1,461 | About £188,000 |
| 30 years | About £1,342 | About £233,000 |
Key point: the 30-year term has the lowest monthly payment in this example, but the highest total interest.
Calculate mortgage payments by term
Use the UK Mortgage Repayment Calculator to test different mortgage terms and see how they affect monthly payments and total interest.
Mortgage term vs mortgage deal period
A common mistake is mixing up the mortgage term with the mortgage deal period.
| Term | Meaning | Example |
|---|---|---|
| Mortgage term | The full period the mortgage is scheduled to be repaid over. | 25 years |
| Fixed-rate period | The period your rate is fixed for. | 2 years or 5 years |
| Tracker period | The period the tracker product applies for. | 2 years or lifetime tracker |
| SVR period | The period you are on the lender’s standard variable rate. | After a deal ends, unless you switch or remortgage |
Why mortgage term matters
Mortgage term matters because it affects affordability, interest cost and how long you carry the debt.
- Monthly payment: a longer term usually lowers the monthly repayment.
- Total interest: a longer term usually increases the total interest paid.
- Affordability checks: lenders assess whether the monthly payment fits your income and commitments.
- Retirement planning: a long term may run into retirement age.
- Overpayment strategy: overpaying can reduce the effective term if the lender applies it that way.
Short mortgage term vs long mortgage term
Neither is automatically better. A shorter term can reduce total interest, but it increases the monthly payment. A longer term can make the payment easier to afford, but it can cost more overall.
| Option | Main benefit | Main drawback |
|---|---|---|
| Shorter term | Mortgage can clear sooner and total interest may be lower. | Monthly payment is usually higher. |
| Longer term | Monthly payment is usually lower and affordability may improve. | Total interest is usually higher over the full mortgage. |
Balance point: choose a term that is affordable without stretching so far that the total interest becomes unnecessarily high.
Can you change the mortgage term?
It may be possible to change the mortgage term, but it depends on the lender, affordability checks, your age, the product terms and whether you are switching or remortgaging.
- You may ask the lender to extend the term to reduce monthly payments.
- You may ask to shorten the term to repay faster.
- You may choose a new term when remortgaging.
- Overpayments may shorten the effective term if monthly payments stay the same.
- Some changes may require affordability checks or advice.