A short term mortgage is one that’s repaid over 15 years or less. Below, we cover how short term mortgages work, their advantages and drawbacks, and what to think about before choosing one.
A mortgage term is the length of time you have to pay back the money you’ve borrowed to buy your home.
In the UK, the standard mortgage term is 25 years. However, lenders offer a wide range of options, with mortgage terms typically running anywhere from around six months up to 40 years.
A short term mortgage is one that’s paid back over 15 years or less. Because the loan is spread over a shorter period, monthly repayments are higher, but there’s less time for interest to build up overall.
A long term mortgage is usually paid back over 30 years or more. Monthly repayments tend to be lower, but you’ll typically pay more interest in total over the life of the mortgage.
Short term mortgages aren’t right for everyone. They’re usually considered by borrowers who are confident they can manage higher monthly repayments.
They’re often considered by people who:
There are several reasons why some people choose a shorter mortgage term.
Here’s an example of how the term length can affect costs:
These figures are for illustration only and assume a capital repayment mortgage with a constant interest rate and no product fees. Your actual repayments will depend on your lender and circumstances.
You can use our mortgage repayment calculator to see how different terms could affect your own repayments.
A shorter mortgage term isn't necessarily the right choice for everyone. Choosing the right mortgage depends on your income, future plans and how comfortably you can afford the repayments.
There are a couple of important trade-offs to weigh up before choosing a shorter mortgage term.
Just like longer term mortgages, short term mortgages come in different forms, each with its own features and trade-offs. The right option depends on how you want your repayments to work and how much flexibility you need.
You can also read our guide to the different types of mortgage.
With a short term interest only mortgage, you only pay the interest each month. The amount you borrowed doesn’t reduce during the term and must be repaid in full at the end.
This can keep monthly payments lower, but lenders will want to see a clear plan for repaying the full balance. This might include savings, investments, or a private pension. Some lenders may also ask for a much larger deposit (in some cases up to around 50%) and higher incomes (often quoted in the £75,000–£100,000 range). Without a suitable repayment strategy, you could still owe the full mortgage balance at the end of the mortgage term.
A short term fixed rate mortgage lets you lock in your interest rate for a set period, such as two, five or ten years, or sometimes for the full mortgage term.
This means your monthly repayments stay the same during the fixed period, which can make budgeting easier. Many fixed-rate mortgages also include early repayment charges during the fixed period, so it's worth checking the terms before making changes to your mortgage.
A short term tracker mortgage follows a benchmark rate, such as the Bank of England base rate, with a set margin added by the lender.
If the base rate goes up or down, your interest rate and monthly repayments could increase or decrease if interest rates change, so it's important to make sure you could still afford your mortgage if rates rise..
A short term offset mortgage links your mortgage to a savings or current account with the same lender. The money in that account is offset against your mortgage balance, reducing the amount of interest you pay.
For example, if you have £10,000 in savings and £100,000 left on your mortgage, you’ll only pay interest on £90,000.This is because the mortgage balance is ‘offset’ by your savings.
With a short term mortgage, because the minimum mortgage term is shorter, a larger portion of the balance is repaid each month. In some cases, some lenders may offer competitive rates on shorter mortgage terms, although availability depends on your personal circumstances and the lender's criteria..
Lenders also factor affordability more closely into pricing. Higher repayments mean they’ll look carefully at your income, outgoings, and any existing commitments before offering a rate.
Getting a short term mortgage follows the same basic process as any other mortgage. You’ll need to meet the lender’s criteria and show that you can comfortably afford the repayments.
Because monthly payments are higher on shorter terms, lenders usually look more closely at affordability. When you apply, you’ll be asked to provide documents to confirm your identity, address, income, and spending. Your age, credit history, and employment status are also taken into account.
Here’s a quick reminder of the documents needed for a mortgage.
Eligibility for a short term mortgage is assessed in a similar way to other mortgages, but lenders tend to be more cautious because the repayments are higher.
They’ll usually look at:
Yes! As a whole-of-market mortgage broker, Habito can search across 20,000 mortgages from over 90 lenders to help find a short term mortgage that fits your situation.
You can find out more about how we work and how we can support you throughout the process here.
Your home may be repossessed if you do not keep up repayments on your mortgage.
People usually choose short term mortgage loans because they want to repay their mortgage more quickly. This can reduce the total amount of interest paid and allow them to own their home outright sooner. Shorter terms can also appeal to borrowers approaching retirement or those with stable incomes who are comfortable with higher monthly repayments.
Yes, it’s possible to remortgage a short term mortgage. However, it’s less common than with longer terms, as many people choose a short term mortgage with the intention of clearing it quickly.
If your circumstances change, remortgaging could let you switch to a different term or deal. It’s worth weighing up any fees involved, as these can sometimes outweigh the benefits of switching.
Short term mortgages are typically set up to be repaid over 15 years or less. Some lenders offer even shorter options, while others set a minimum mortgage term that applies across all their products.
The exact term you’re offered will depend on the lender and your circumstances, including affordability and age at the end of the mortgage.
The main difference is how long you take to repay the loan. A short term mortgage is repaid over 15 years or less, while a long term mortgage usually runs for 30 years or more.
Shorter terms come with higher monthly repayments, but there’s less time for interest to build up. Longer terms spread the cost over more years, which lowers monthly payments but typically increases the total amount of interest paid.
The shortest mortgage term available in the UK can vary by lender. In theory, mortgage terms can start from around six months, but in practice most residential mortgages have a longer minimum mortgage term.
For standard residential mortgages, the shortest mortgage term you’re likely to see is usually several years rather than months. The exact options available will depend on the lender and whether the mortgage is residential, buy to let, or a specialist product.
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What is a long-term fixed rate mortgage? Should I get one? And what’s the best long-term mortgage out there? Habito has the answers.
Habito specialises in helping you get the best mortgage or remortgage, all online, for free
