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A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s.
Data released under the Freedom of Information Act by the Financial Conduct Authority (FCA), and analysed by wealth manager Quilter, revealed a surge in the number of mortgages being sold with extended terms, particularly among buyers aged over 36.
In the first three quarters of 2024 alone, 22,103 mortgages with a 35-year term were issued to this age group — already surpassing the total number of such loans in any previous full year since 2018. Over the past five years, the number of older borrowers taking out longer loans has surged by 156%, a sign that more and more of those getting on the property ladder are extending mortgage terms to manage rising property prices and high living costs.
The jump in longer mortgage terms is partly driven by rising property prices, which have made it difficult for buyers to enter the housing market without taking on larger loans, coupled with higher interest rates, which have pushed up monthly repayments.
Many borrowers are opting for 35-year terms to keep their monthly payments more affordable.
While these long-term loans may ease affordability in the short term, they also come with long-term risks — especially as borrowers approach retirement age with significant debt still to repay.
Assuming a 36-year-old takes out a £250,000 mortgage with a 35-year term at the current Bank of England base rate of 4.75%, they could face monthly repayments of around £1,145. While interest rates may fluctuate over the course of the loan, the borrower would still need to be confident they can meet their repayment obligations until the age of 71 — three years after they could expect to qualify for the state pension, and 14 years after reaching the normal minimum pension age.
Karen Noye, mortgage expert at Quilter, warns of the potential long-term consequences for older borrowers: "The sharp increase in the number of mortgages sold to individuals over the age of 36 with a 35-year term in the UK highlights growing concerns about housing affordability, rising interest rates, and changing socio-economic trends.
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"From just over 5,900 such mortgages issued in 2020 to more than 22,000 in the first nine months of 2024 alone, the data paints a striking picture of how financial pressures are reshaping homeownership."
At present, the full state pension is £221.20 a week, or approximately £960 per month. However, with the cost of living expected to rise over the next 35 years, those on a state pension alone will likely struggle to cover both mortgage repayments and everyday living expenses, leaving borrowers reliant on their savings.