18 Aug Long Term Mortgages
The average period for repayment of a mortgage is 25 years, but according to FCA data, the number of mortgages being sold with terms of 35 years or more has increased by 70% over the past year.
Financial pressures mean new house buyers are opting for longer-term mortgages, so the lower repayments leave them with more money to spend day to day.
The recent surge in 35+ year mortgage sales is partly driven by higher overall mortgage volumes as buyer’s rushed to beat the original stamp duty holiday deadline at the end of March.
What are the pros and cons of paying off your mortgage over a longer period?
Lee Howard of Howard Mortgages comments: “It is important that all of the risks of long mortgage terms are properly explained and understood. For some borrowers, such as first-time buyers, securing a mortgage with a 35+ year term may be the only way to afford a property due to the lower monthly repayments. But you’re likely to pay considerably more in interest over the course of your full mortgage term.”
“It is also worth considering that the longer the mortgage term, the older you will be when making the final repayment. This means that people may end up borrowing beyond their retirement age when they perhaps cannot comfortably afford repayments. An adviser can help you find the best product for your unique financial circumstances and ensure your mortgage product is right for you, especially if you are looking to commit to a 35+ year term. Some products may allow for the flexibility to overpay. Being able to do this without penalties gives you added flexibility if you get a bonus, pay rise or a cash windfall. You can also pay the contractual amount if times get tough.”
With offices in Torbay, Teignmouth, Exeter & Bristol, we’ve got the South West region covered and we also customers throughout the UK. Our team of award-winning mortgage advisers are on hand to provide you with tailored mortgage solutions that fit. We’re known for our excellent service that guarantees customers a simple and cost-effective process. Service should be seamless so we make sure our customers work with the same expert mortgage adviser from start to finish.
We offer an initial appointment at no cost or obligation to explore the options and can be done remotely or in person, contact the team at Howard Mortgages on 01803 554455 or contact us here.
Your home may be repossessed if you do not keep up repayments on your mortgage.