Mortgage Advice: 35yr vs 40yr

Looking for some advice on this.

Which makes more sense, a mortgage over 35yrs or 40yrs. Repayments on the 35yr option are €300 more expensive a month but the mortgage term is 5yrs less.

I am a first-time buyer and am not planning on living in the house for life. I will probably try and trade up in less than 10yrs. So would the monthly saving of the 40yr mortgage mean much higher interest payments?

Yes, a 40 year mortgage will mean you’re paying less each month, but a higher % of thepayment is made up of interest, and a lower % is actually paying off your loan.

So when you come to sell your house in 10 years or whatever, you’ll find that less of your monthly payments will have gone towards paying off the mortgage, than if you’d chosen the 35 year option.

No-one should have to take out a mortgage of that term anyway - if you are, you’re overstretching yourself.

If you play around with this mortgage calculator you can get an idea of how interest is related to the term of the mortgage. Try changing the term from say 20 years to 40 years and note how the interest part of the graph changes in the early years…

I’d be wary of buying to “trade up” in the short term - if I were you I’d be looking for somewhere that I am happy to live in for 10 years at least, and not just buying something that you can put up with in the hope it will increase in value.

This forum is filled with posts addressing the issue you want addressed. Try doing a search. It is very difficult for people here to keep going over the same stuff again and again. It is for me anyway.

The answer is NEITHER! Your question is ‘whats the difference between insanity and lunacy’ , to me anyway.

Normal People in 1988 , maybe even as late as 1998 could pay off a 20 Year mortgage with the interest rate back then about 10% , that on a house too !

Normal People in 2008 need a 40 year mortgage** to do the same** and at a mortgage rate of only 5% and this tells you the price is simply too high.

A normal person nowadays will end up with a jerry built plasterboard flat and not a house of course and they earn say 35k-40k a year.

**It takes twice the time at half the interest rate to end up with less.
This is Madness :frowning:

Thats NORMAL now.

Until the normal person can afford a decent flat over 25 years the price is too high. Save some money for the next year and think about this again when you can get a 20 or ( MAX) 25 year mortgage.

Now go away and save for a year while watching the prices drop towards normal !!!

Apologies, I did try searching on this forum but found nothing. If you can point me in the direct of the search results you are talking about that would be great.

Unfortunately life does not stand still and while everyone knows it is not as ideal a time to buy as it was in the early 90s people that need to buy have to buy. Thanks for the sunny outlook though! :wink:

Bang on “2Pack”.

If you are following the evidence put forward on the pin you would know not to be buying a property in the present climate. So you must be getting a bargin but to be getting a bargin you should be able to repay the loan under an acceptabe term and 30 -35 or 40 years is off the wall.

Enjoy yourself and come back in five years time and buy over 20 to 25 years having kept your hair in the meantime!

As per the above and 2packs post.

35 and 40 yr mortgages were simply means for banks to cash in on boom times and the easy credit.
Credit crunch time is here and the unique scenario which fuelled out bubble required several factors which we wont see until at least 2010+
Save your money

i assume you are in your twenties if you are contemplating such long term mortgages. if i were you, i’d save money, leave a deposit amount in Ireland to gain interest and go travel the world with the rest. by the time you get back your options will be greater.


You’re choice is between paying less each month, but more overall.
Paying more each month but less overall.
That’s it. There’s no magic to it.

If you can afford to pay down your mortgage quicker then you should.

The only exception there is that if you can pay down your mortgage slowly, but invest the money “saved” each month somewhere that earns a better rate than you’re paying on your mortgage, then that might make sense.

To be honest, if you’re asking about paying over 25 or 40 years then you’re probably not going to be confortable with this invest elsewhere idea, so my advice would be pay down your mortgage as quickly as you can.

Remember, just because you opt for a longer term, doesn’t mean to can’t pay lump sums into the mortgage from time to time. Also, you can opt for the 40 year mortgage, but pay each month as if it were a 35 or 30 year mortgage.

As for the lunacy of terms like 35 years and 40 years. I think it’s mad, completely nuts, but if your eyes are open then go for it.


You don’t **need **to buy at present , if you feel you must then thats your problem.

I have no further advice to offer you in that case because you feel you need to do something which is , to my mind, irrational by normal standards . 35 year mortgages are a bubble invention to deal with the fact that no customers were left who could afford a 25 year mortgage.

Its like cocaine dealing, the more you use the bigger your credit line gets .

By the same logic I feel I need to buy a Ferrari when the trusty 3 series is perfectly adequate for my needs . Yet I resist , damn :frowning: !


You can run the figures yourself at Karl’s Mortgage Calculator to see the difference.

Overall I agree with 2pack - 35-40 mortgages are madness, but especially in a market where prices are falling back so that in a couple of years you might be able to go for a 25-30 year mortgage.

While making sure you can afford the monthly repayments is important, do take the time to look at the overall additional expense of a longer term. If you can hold off and save yourself €50k on purchase price now, you’ll probably save yourself another 50k in interest over the course of the loan. Stick that after-tax 100k in a pension with full tax relief and you’re putting maybe 180-200k in your pension for when you retire… almost 4 times the original saving… very rough figures but it makes you wonder…