Do Mortgage Payments Gradually Get Less Over Time?

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adampember | 15:44 Wed 04th Oct 2017 | Business & Finance
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Hi, me and my partner are looking to buy a first home, i was wondering do the monthly mortgage payments gradually decrease over time as you pay off the house or do the they stay roughly the same?
For instance if we bought a house for 100k over a 25 year period and the payments were £450 per month would these payments decrease over the years or stay around the same over the 25 years?


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Depends on your mortgage type but usually, for a repayment, they only lessen in the sense that inflation takes it's toll and your salary increases compared to the monthly payment. But as money is dirt cheap to borrow at present don't go borrowing anywhere near your potential limit. May regret it later.
If it is a "repayment" mortgage - i.e. you pay capital and interest each month, the payments will remain the same throughout if it is a "fixed" rate loan or if it is a "variable" rate mortgage and the rate does not actually change.

If your loan is arranged with a variable rate of interest, then to keep to the original term, you will need to amend your payments accordingly.

When the interest rate goes down, borrowers may be allowed to keep their payments at the previous level in order to shorten the term.

When interest rate go up, and the contract allows, borrowers who do not increase their payments will find that the term will become extended.

Most lenders will allow for additional capital "lump sum" payments to be made each year but this may be limited to something like £1000 without incurring additional charges.

The proportion of capital and interest you pay in each instalment will vary over time. You will find that it will take approx 19/20 years to reduce the loan balance to half the original amount. The remaining 50% is then paid off over the last 5 or 6 years. (Called "amortisation").

Talk to your prospective lender or your adviser and ask them to explain the mechanics and more important how they may affect you under particular circumstances.
I think the short answer is the payments will stay the same unless/until the rate of interest on your product changes.

If it's interest only the repayments will rise or fall in proportion to the interest rate change If it's repayment mortgage the capital repayment element stays the same but the interest element will go up or down as rates change
We had a straight repayment mortgage....the payments did go up and down a bit BUT the most helpful thing was that wages got bigger and I kept the repayments at a higher rate and paid it off 7 years give you some figures...when the mortgage started the repayments were £250 a month..that sound great but my wages were only £350 a month....I was soon earning more than that so after a couple of years it was no problem..
The loan repayments will stay the same throughout the term of your mortgage
Paying of money on mortgage is always a good idea if you can afford to - better than savings
In a repayment-type Mortage, which is the most common by far that people take out these days, the monthly payments stay the same throughout the 25 years. But if the interest rates go up or down ( and they will ) then your monthly payments will fluctuate.

Its normal for your final payment be slightly different.

Be wary of future interest rates though. We have had very, very low rates for a few years now, but they they must rise at sometime in the future.

First all, by not very much. But I can recall paying 15% plus, for my Mortgage, in the early 80's, which would utterly cripple most people today.

As someone has already said, over the 25 years, its likely that the proportion of your income spent on the Mortgage will become less, as you get promotion and/or pay rises in the future.

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