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Over half of all mortgages have a 40-year term

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Longer terms can reduce monthly repayments, although the overall amount repaid will increase
Over half of all mortgages have a 40-year term

More than half of residential mortgages now have a term of up to 40 years, according to Moneyfacts.

The financial information provider said this means more borrowers will be able to spread their mortgage repayments over a long time period.

It found that 2,782 (57.01%) of residential mortgage products currently available have a standard maximum mortgage term of up to 40 years.

What’s changed?

Historically, standard mortgage terms were 25 years, but a growing majority of products are now available to be extended for a period of 40 years.

By extending their mortgage term, borrowers may be looking to reduce their monthly repayments and therefore are more likely to meet strict affordability requirements.

Yorkshire Building Society is the latest lender to increase its maximum mortgage term criteria to 40 from 35 years, said Moneyfacts, at the same time as increasing the maximum age of a borrower at the end of a mortgage from 75 to 80 years.

Darren Cook, finance expert at, said: “Mortgage providers are permitting extended maximum mortgage terms of up to 40 years in conjunction with extending the maximum age that a borrower may be at the end of a mortgage. Our recent research shows that more than four-fifths (83%) of residential mortgages can end when the borrower is 70 years of age or older.”

Pay longer, pay more

“A longer-term mortgage may reduce monthly repayments, however, the additional interest that accumulates over an extended mortgage term could be considerable,” added Cook.

“For example, a £250,000 repayment mortgage at a rate of 2.50% over 25 years equates to a monthly repayment of £1,121.54 and total interest payable would be £86,463 over the term. However, the same mortgage taken over a 40-year term would reduce the monthly repayments to £824.45, but increase the total interest to be paid to £145,733, resulting in an additional £59,270 in interest.

“Furthermore, the longer a borrower extends their mortgage term, the older they will be when they have finally repaid their mortgage. An extended mortgage term may go beyond pension age, so it is imperative that these borrowers consider their options and attempt to make provisions if their personal circumstances change.”

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