Rising mortgage rates have pushed homeowners to take out longer mortgages, with a fifth of first-time buyers (FTBs) in 2023 opting for mortgages with terms of 35 years or more (1).
In 2021-22, the average age of an FTB in England was 34 (2) meaning that many new homeowners could still be paying for their home when they enter retirement. While it’s understandable that many resort to longer loans to afford their first home, it will cost them more in the long run.
But it’s not just FTBs who are feeling the financial strain; general demand for mortgages with terms of 40 years or more increased by 16% last year (3). Similarly, the number of borrowers with mortgages of 30 years or more rose from 41% to 51% between 2021-23.
Your home may be repossessed if you do not keep up repayments on your mortgage.
1 UK Finance
2 USwitch
3 Mojo
