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'Are 30 year mortgages to become the norm?'

Monday, February 13, 2017 6:06:00 PM
Here at the Mortgage Brain in Gloucestershire we are seeing more and more of our clients opt for a 30-year mortgage, and a recent report from the Halifax indicates that the 25-year mortgage might be on its way out, revealing that 28% of first-timers chose 30- or 35-year mortgage terms in 2016, up from 11% in 2006

There are many factors that include high house prices, student debts and a rise in the age at which couples have children, meaning people are tending to buy a home later in life than in previous years and so are opting for a longer repayment term. The Halifax report shows that the average age of a first-time buyer is now 30, although this does change from region to region. The average figure for London is 32, but in certain boroughs and areas, such as Barnet and Ealing and Slough in Berkshire, it is 34.

Stretching the term of the loan reduces monthly payments, which makes the mortgage more affordable and with mortgages available up to 40 years long there are suitable options for most people who have a decent regular income. The disadvantage however is very simple... if you take a longer mortgage you will pay more interest, meaning the property will cost you more money.

This trend of taking longer mortgages now means that many people are continuing to pay mortgages once they have retired, something that was unusual up until recent times.

In its report, the Halifax said that as the cost of a typical first home has risen, there has been a growing trend towards mortgage terms longer than the traditional 25 years.

In 2006, almost two-thirds (64%) of first-time buyers opted for a term of between five and 25 years, while the remaining 36% were over 25 years. Ten years on, the picture is dramatically different: 60% of first-time buyer mortgages involve a term of at least 25 years.

In 2016, the average price paid by someone who had never owned a property before was £205,170 - the highest on record. At the height of the housing downturn in 2009, the figure stood at £135,254.

In London, first-time buyers have seen the average price rise by 81% since 2009 to reach £402,692 - again, the highest on record.

If you are looking for advice on your mortgage and want to discuss what you can and cannot afford, to find the most suitable mortgage please contact us here at The Mortgage Brain in Gloucestershire. We are available on 0333 340 8888, or visit

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