My wife and I are currently househunting and have, as part of this process, had a preliminary meeting with a mortgage adviser. They asked all the expected questions about finances to see what our monthly payments would be and how much we can afford.
I have a pretty good spreadsheet for calculating monthly payments, stamp duty, necessary deposit etc from the inputs like house price, salary, interest rate and desired term so thought I had a decent handle on this; I had pretty much already decided on a term of 25 years, as this comes out with a nice monthly payment that we can afford (£1,640).
The adviser then threw a spanner in the works by recommending that we actually get a longer (30-year) term (at least for the initial 2-year fixed deal) and then, assuming all our finances are in order, overpay each month to make up the difference from £1,430 back to £1,640.
Is this solid advice or not? Whilst it sounds nice to have the ability to forgo the overpayments each month if our financials change, I'm unable to judge the cost of this convenience because my spreadsheet has no way of taking overpayments into account (I don't really know how they work. Do they effectively reduce the term of the mortgage?).
My wife is suspicious that the mortgage adviser is acting in their own best interest by getting a bigger kickback from the lender for a longer term.
Any help on how to compare these two mortgage situations would be greatly appreciated.
Update: Giving a tl;dr of my question.
Do two mortgage loans with exactly the same interest rate and repaid at exactly the same monthly rate result in the same total cost of the loan, regardless of which 'term' was originally agreed with the lender?