A growing number of first-time buyers are opting for 35- or 40-year mortgages in order to be able to buy a home. As house prices and interest rates remain high, buyers are taking out longer loans to keep their monthly repayments affordable, but experts say they risk paying thousands more over the length of the mortgage.
A report from UK Finance, the lenders’ trade body, says that even though households are under less pressure than at the peak of the cost of living crisis, the number of people taking out lengthy loans is “far higher than seen in the past”. In June, 22% of loans taken out by first-time buyers were for 35 to 40 years. Just five years ago, this stood at 6%. More lenders now offer terms of up to 40 years – even 45 in one case.
