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Today's first-time buyers won't be mortgage-free until they're 63

Today's first-time buyers won't be mortgage-free until they're 63
Christina Hoghton
Written By:
Christina Hoghton
Posted:
28/06/2024
Updated:
28/06/2024

Many first-time buyers will be paying off their mortgages well into their 60s, according to new research.

Mojo Mortgages has published a report looking at the average age of first-time buyers across the UK, and the age they will typically repay their home loan.

The mortgage broker found that the average age of a first-time buyer in the UK is 33 years and eight months.

And the most common mortgage term they take out is 30 years.

Given this, it said that the average first-time buyer isn’t expected to be mortgage-free until they are 63 years and eight months.

However, the typical age that today’s first-time buyers can expect to be mortgage-free differs widely across the UK.

Regional variation

For example, in London, borrowers will be paying their mortgage beyond retirement age, until they are 66 years and eight months.

The West Midlands and South East follow closely behind, with first-time buyers in these regions expected to pay off their mortgages at 64 years and five months and 64 years and four months respectively.

At the other end of the scale, those in Wales are likely to be mortgage-free the earliest in life, at 59 years old. That’s because they are also the earliest to join the property ladder, at just 31 on average.

Below are the typical ages that first-time buyers across the regions would repay their mortgage:

London – 66 years, 8 months

West Midlands – 64 years, 5 months

South East – 64 years, 4 months

East of England – 63 years, 9 months

Yorkshire & the Humber – 63 years, 7 months

South West – 62 years, 9 months

North West – 62 years, 5 months

East Midlands – 62 years, 11 months

North East – 61 years

Scotland – 60 years, 7 months

Wales – 59 years

Paying back more

Longer terms can thwart retirement planning for borrowers and they will also end up paying back a larger overall sum.

John Fraser-Tucker, head of mortgages at Mojo Mortgages, said: “While longer mortgage terms can provide some short-term relief in the form of lower mortgage payments, they come at the cost of significantly higher overall interest charges over the life of the loan.

“Our research has found that with a 10% deposit and the current average mortgage rate of 6.03%, the total cost of an average-priced house (£264,500) varies significantly on the loan term.

“For a 25-year loan term, the total cost would be £461,400, which includes the principal amount and interest charges. However, if you extend the loan term to 30 years, the same house will cost an additional £53,760, bringing the total cost to £515,160.

“And if you extend the loan term even further to 35 years, the total cost will increase by £110,640 compared to the 25-year term, amounting to £572,040.”

Related: Who are the UK’s first-time buyers and how much do they borrow?