The Mortgage Marathon: Why 40 Years of Payments is the New 26.2 Miles

A growing number of first-time buyers in the UK are taking out mortgages of more than 35 years in an effort to make their repayments more affordable, according to a report by industry body UK Finance. The report revealed that a record one in five first-time buyers are signing up to mortgages of more than 35 years. While this trend has been seen since 2010, the growth in borrowing over a longer term accelerated rapidly through 2022.

This trend is not surprising, given that property prices have continued to climb while wages have remained static over the last decade. David Pett, director with national conveyancing provider, MJP Conveyancing commented on this trend, saying: “The trend of long-term mortgages is a reflection of the affordability issues many homeowners face in the UK. Young adults are struggling to get on the property ladder, and as a result, there has been an increase in mortgage lengths, with more products that allow homebuyers to spread repayments over a 40-year period becoming available”.

While longer mortgages can help reduce monthly outgoings, they do come at a cost, with homeowners accruing thousands of pounds in interest over the lifetime of the mortgage. In many cases, this means homeowners will still be paying off the deals well into their 70s. The average age of first-time buyers is also increasing, which means some homeowners could still be paying their mortgage in retirement.

It’s important for homebuyers to consider both short and long-term financial implications when choosing a mortgage product. While a 40-year mortgage can offer lower monthly repayments, greater flexibility, and the ability to purchase a larger house, it also means paying more interest over time, paying off the mortgage later in life, and a slow build-up of equity. Ultimately, whether taking out a longer mortgage is the right decision will depend on individual financial situations and priorities. It’s worth noting that taking out a 40-year mortgage initially doesn’t mean homeowners are stuck with it for the full term. Remortgaging when they have more disposable income, for example, can help reduce the term and benefit from lower outgoings to begin with.