For decades, a 25-year term has been arguably the default starting point for all mortgages. Millions of borrowers have taken their home loan over this period, but now many experts see a 25-year mortgage as a thing of the past.
As more and more people decide to take their mortgage over 35 or even 40 years, we look at the latest figures, why borrowers are choosing a so-called ‘marathon’ mortgage and what you need to consider if you’re thinking about committing to a 40-year home loan.
Half of mortgage products let you borrow up to 40 years
New research has revealed that more than half of all residential mortgage products now have a standard maximum mortgage term of 40 years.
Data published in FT Adviser shows that borrowers can now sign up to 2,744 mortgage products that last for 40 years, equivalent to 55% of the whole residential mortgage market.
Just five years ago, only two-fifths of products on the market allowed a borrower to sign up to a 40-year deal.
The research yourloansllc.com/3-month-payday-loans/ online is backed up by official data from the Financial Conduct Authority that reveals the number of borrowers taking out so-called ‘marathon’ mortgages lasting 35 years or more has reached its highest level since the 2011 recession.
The figures show that 28,310 mortgages running for 35 years or more were approved in 2017, the most recent year for which the data is available — equivalent to a 27% rise on the previous year.
The FCA said 2.5% of mortgage approvals in 2017 were for ‘marathon’ deals, compared with 1.6% in 2011.
Darren Cook, finance expert at Moneyfacts, said: “In the past, a standard term of a mortgage generally amounted to a period of 25 years, but most products are now available for a period of 40 years. Continue lendo