An increasing number of borrowers will be repaying their mortgage into their 70s, research has revealed.
There has been a significant rise in the number of people taking out mortgages with terms of 35 years or more, according to data from Quilter. It found that within the first nine months of 2024 alone, some 22,103 mortgages with a term of 35 years or more were sold to people over 36. And according to Quilter, there has been a 156% increase in the number of older borrowers taking out longer-term loans.
Greater mortgage affordability
These longer-term mortgages can increase affordability in the short term, as they require smaller monthly repayments. However, those with longer-term loans will still have to make mortgage repayments well into their 70s, which could hinder their quality of life in retirement.
For example, someone aged 36 taking out a £250,000 mortgage with a 35-year term at an interest rate of 4.75% could expect to pay a monthly repayment of £1145, Quilter explains. And, while this figure could change over the years in line with interest rates, borrowers taking out mortgages now would need to be confident they could make these kinds of repayments until they were 71.
It’s also important to understand that a longer-term mortgage can mean you will pay more interest overall.
Seek advice before committing
If you’re considering committing to a 35-year term mortgage, it’s vital that you consider affordability under your present circumstances, as well as how you plan to repay your mortgage in future years and how this might affect your quality of life going forward. Speaking to an experienced financial adviser is key – remember, we’re here to help with any mortgage advice and support you need.