A standard mortgage used to run for 25 years but there is a growing
trend for so-called ‘mammoth’ loans spread over up to 40 years as first-
time buyers and movers opt for lower monthly payments.

A dramatic increase

According to UK Finance, the last two years have seen a dramatic increase in 40-
year mortgages. In February 2023, 18% of all first-time buyers opted for a
mortgage term of 35 years or more, compared to 8% in February 2022.
According to Moneyfacts, 67% of all mortgage products currently available have
a standard maximum term of up to 40 years.

At what cost?

The main benefit of borrowing over an extended period is that it helps with
affordability, but at what cost? You’ll end up paying more interest overall.

A longer term may allow you to borrow more, so you’ll need a smaller deposit.
However, you’ll need to be aware that the equity in your home won’t grow as
fast as you’re paying the debt back more slowly.

You’ll also need to consider whether a longer mortgage term will mean that
repayments carry on into retirement.

We’re here to help

If you’re thinking of extending your current mortgage to reduce your monthly
outgoings or you need advice on a new mortgage, it’s always best to speak to an
adviser.

Your home may be repossessed if you do not keep up repayments on
your mortgage