The Rise in Over-40s Taking Longer Mortgage Terms

According to the latest data from Zoopla, there has been a marked rise in the over-40s taking out 35-year mortgages. There has been a rise of nearly 40% this year as the cost of living squeezes family finances.

The trend of over-40s taking out mortgages over a 35-year term has sharply risen over the last 12 months, with more than 3,000 over-40s predicted to take out these long-term mortgages. This is a 39% increase compared to 2021 and a 433% increase compared to 2020.

In January and February, 478 over-40s took out a mortgage term of 35 years or more, according to the Financial Conduct Authority, and since then, there has been a steady increase.

Typically, younger buyers take out a mortgage over a longer term, especially when buying their first home. However, with the rising cost of living, older buyers have been driven to take longer terms to afford the monthly repayments. For example, if you have a £250,000 mortgage with a rate of 5% over 25 years, your repayments would be about £1,460. If this is taken over 35 years, your repayments would be £1,260. However, the longer you repay your mortgage, the longer it will take to pay and the more it will cost you in the long run.

The downside is that for those over 40 who are considering a longer-term mortgage deal is that you’ll be paying a mortgage well into your retirement. You could be well into your 70s and 80s before it’s paid off, so you need to ensure that you can afford to make the repayments once you have stopped working.

It’s advisable to try to overpay your mortgage if you have a long term over which to pay off your mortgage – and to talk to a mortgage broker to get a good overview of the pros and cons.