35+ year mortgages on the rise

I would agree that significantly more clients are taking longer terms to keep payments within their preferred budget, meaning that less capital is paid in the short term and more interest is paid overall.

However with the flexibility of mortgages these days it is highly unlikely a client taking a 35 or 40 year term is actually going to keep the mortgage for that long. They will fix in for 2, 3 , 5 or even 10 years then re-mortgage or move, at this point re-negotiating the deal and if rates are more favourable as expected, the term can then be reduced.

You then have the scenario where a client may sell and move meaning they will more than likely be starting fresh with a mortgage anyway and can then re-structure it to meet their needs.

To conclude, it is the fixed rate period which is fixed in, not the mortgage term

I suspect 35/40-year term mortgages will soon become the norm amongst first-time buyers and home movers increasing their mortgage debt. As 1% mortgage rates disappear into the ether and house prices continue to rise, we're already seeing more interest from borrowers stretching out their mortgage term to keep the monthly payments affordable. The upside is that you can minimise what you pay back on a monthly basis, the downside is that you'll pay more interest to the bank in the long-term. Focus on what priority is (paying less monthly vs paying less interest overall) and seek advice to fully understand your options.

A 35-year mortgage is a longer-term mortgage than a 30-yr mortgage. This means that you will have lower monthly payments, but you will also pay more interest over the life of the loan.
Here are some of the risks of a 35-year mortgage:
You will pay more interest. The longer you take to repay your mortgage, the more interest you will pay. This is because the interest is calculated on the outstanding balance of the loan, and the outstanding balance will be higher for a longer-term loan.
Your equity will build more slowly. Equity is the difference between the value of your home and the amount you owe on your mortgage. With a 35-year mortgage, you will be paying down your mortgage more slowly, so your home equity will build up more slowly.
In my experience, younger First Time Buyers, tend to opt for longer-term mortgages to reduce monthly repayments initially and as the year's progress, and circumstances change, start looking to reduce the term where it becomes viable and affordable.

We've seen a considerable increase in longer mortgage terms, particularly from younger borrowers, not just first-time buyers, grappling with higher mortgage rates and seeking to keep their payments affordable and sustainable. There are numerous risks to this. The most obvious is that you pay more interest in total over the term. However, this is somewhat mitigated because as borrowers age, their income tends to increase at the same time as their mortgage decreases, meaning they may have the opportunity to reduce the term when their initial mortgage product ends. The more significant risk is when people take mortgages past their state retirement age, sometimes up to age 75. Most people can be pretty bad at imagining the future, so while they may think they'll still be able to work at 70 or beyond in their 30s, that's probably not the case when they get there.

I have seen a big rise in the number of clients who want to push their mortgage term until retirement. The sentiment seems to be that they'll reduce when the market is more favourable and overpay where possible in the meantime.

Mortgage terms are being increased across the board by customers as they try to negate the pain of interest rate rises. First time buyers are seeking longer terms to take the first step onto the housing ladder, resulting in terms of 35 years or higher. Most are hoping to reduce the mortgage term later down the line, hoping interest rates reduce down to more manageable levels. Customers seeking longer terms need to be aware they pay far more interest by extending the term, but currently its seen as a necessary step to take

Unsurprisingly, to try to mitigate some of the increase in their mortgage repayments, borrowers are looking at longer terms. In reality, this is no bad thing, as it is a lower-risk way to control affordability than taking all or a portion of the mortgage on an interest-only basis. We should also remember that the repayment term is not set in stone, a 38-year repayment term might be right now, but on review in, say, 5 years you may be in a position to reduce the term; either because you have seen your income increase, or rates have fallen. The key is to see the repayment term as a tool you can use to help with your affordability, but always remember that you should have the shortest repayment term you are comfortable with, the longer you ultimately pay the mortgage over, the more interest you pay to the lender, so it's best to get it repaid as soon as you can, without stretching yourself to breaking point.

It's unsurprising given how high property prices are and the increase in mortgage payments many borrowers are experiencing. It's also absurd that people should spend 2/3rds of their working life to pay for a home. Lower house prices and higher wages are what's needed, not longer mortgage terms.

With mortgage rates now being so high compared to this time last year, a 35-year mortgage term or even longer, has never been so popular. A longer mortgage term has become a basic necessity for many mortgage borrowers up and down the country, trying to ensure their mortgage payments remain affordable on a month-by-month basis. The market is seeing a huge surge of applicants now requesting to take their mortgage term over as long a period as possible, to mitigate the considerably higher interest rate environment they are now faced with. Borrowers however need to be warned that although in the short term, increasing the length of their mortgage may help to ease the financial pressure on their monthly outgoings, it doesn't come without its risks. A longer mortgage term means paying considerably more in interest payments, and it also may mean that applicants will be forced to retire later in life to ensure they are still earning enough to afford their mortgage repayments in the future too.

Yes, we've arranged a number of mortgages with 35+ year terms, particularly for first-time buyers. This can be a good way of making the payments more affordable as well as meeting lenders' affordability requirements to borrow the amount required. With most lenders offering overpayment allowances, borrowers can also artificially reduce the term of the mortgage by making overpayments as and when they can.

Naturally, the longer the mortgage term, the more interest is paid; but this has to be balanced with affordability and making sure that monthly mortgage payments, along with other living costs don't leave homeowners unable to pay for anything else.

35+ Year plus mortgage terms are becoming more frequent, especially for younger borrowers with today's high property prices and interest rates. However, they are not suitable for everyone - if you don't have pension plans in place and the longer term if the term takes you beyond state retirement age for example. The overall cost of the mortgage will be higher but by working with the client to look at their individual circumstances we would illustrate how this extra cost could be offset by making overpayments when they feel they are in a position to do so. It's not right for everyone, for example, if it's unlikely that your income will increase over the initial term of your mortgage then this may not be right for you as you may not have the option to reduce or adjust your term in the future when your initial rate ends, to reduce the cost of the mortgage.

The most important factor to consider the mortgage term is ensuring it is affordable. If you need a term above 35 years, it is better to do this than struggling to make the payment every month.

You will pay more interest with a longer term. However, you can mitigate this by making overpayments. You can also look to reduce the term in the future when it is more affordable.

This is becoming more and more common but should be entered into with caution - paying a mortgage over a longer term could mean tens of thousands of pounds in extra interest. Generally it's sensible to do the shortest term that you can comfortably afford as this you will spend less money in interest in the long run.

Rising house prices forced people to consider longer mortgage terms last year, and this will only be exacerbated this year by the increasing interest rates offered by lenders. If the mortgage term is still being kept within pension age I don't see a huge issue. Gone are the days when a 25-year mortgage term is the norm. Older generations are renowned for the 'in my day we never did more than 25 years' comments, but lenders didn't need to offer them back then. If terms were restricted to 25 years for the current generation of first-time buyers, many simply would never afford a home.

While longer-term mortgages have been fairly common for purchases, especially amongst First Time Buyers, we're now seeing increasingly longer terms for remortgages as borrowers look to counter the effect of higher mortgage rates on their monthly payments. With lenders able to consider terms up to age 70 and beyond, extending their mortgage term is an option available to homeowners, subject to taking the right advice to make sure it's a suitable strategy based on their retirement plans.

We have seen longer term mortgages become increasingly popular options for buyers to support with affordability issues. However we don’t believe that terms beyond 35 years for most customers really make a whole lot of sense if you weigh up the additional borrowing gain versus the significantly larger amounts of interest they will pay over the term. A typical FTB borrowing £250K, over 35 years would pay £1,425.47 a month at 6% on a repayment mortgage - over 40 years it only drops to £1,375.53, so a £50 saving - hardly material - in return you pay an additional £60,557 in interest over the term.