Research from Moneyfacts.co.uk shows that 50.89% of all residential mortgage products currently available have a standard maximum mortgage term of up to 40 years, up from 35.93% five years ago.
It was not that long ago that many mortgages typically had a standard maximum term of 25 years, but in the days of stricter affordability rules – not to mention higher house prices – those terms can now be extended for much longer than before.
There are currently 2,604 mortgages with a maximum term of 40 years compared with 1,096 in March 2014, at which time 35-year terms just took the edge by accounting for 36.66% of residential mortgages.
Aaron Strutt, product director at Trinity Financial, says: “Longer mortgage terms tend to be popular with younger borrowers who are trying to reduce their monthly costs. Some of the lenders offer more generous affordability calculations if the repayments are pushed past the more standard 25-year term.
“If you are taking a longer term and you find yourself in a better financial position when you come to remortgage it is worth reducing the term, so the debt is repaid much earlier. Many of the lenders allow overpayments so you can also pay more each month to reduce the interest costs.”
Interest-only mortgages are still very popular with our wealthier clients because the monthly costs are so low. Large mortgages are incredibly cheap if you can secure interest-only on a fixed or tracker rate priced around 1.5%.
Call Trinity Financial on 020 7016 0790 to secure a longer mortgage term