Nearly two in five mortgages will not end until 2052: Homeowners turn to ultra-long loans to keep down monthly repayments

• Almost two in five new mortgages are being taken out for 30 years or more
• Borrowers usually sign up for 25-year loans to be paid off before retirement
• Number of households seeking longer terms has more than doubled since 2007 

Almost two in five new mortgages are being taken out for 30 years or more as homeowners turn to ultra-long deals to keep down monthly repayments.

Traditionally borrowers have signed up for 25-year loans, which can often be paid off comfortably before they retire.

But the number of households seeking out longer terms has more than doubled since 2007, leaving them at risk of being in debt into their 70s and 80s.

The number of households seeking out longer terms has more than doubled since 2007, leaving them at risk of being in debt into their 70s and 80s (stock image)

More than 22,000 home loans agreed in July – 39 per cent of the total – were for 30 years or more, according to trade body UK Finance. 

Some of these were for 35 and even 40 years. In July 2007 the total was 10,000. 

Mortgage rates have shot up following last month’s mini-Budget, with the average two and five-year fixed deals reaching 6.65 per cent and 6.51 per cent respectively.

Brokers say more homeowners are extending the length of their deals when remortgaging to ease the pain of soaring rates, but warn that they will pay much more interest in the long term.

Brokers say more homeowners are extending the length of their deals when remortgaging to ease the pain of soaring rates

Analysis by investment firm AJ Bell found that a borrower with a £310,000 mortgage at 3.5 per cent could save £357 a month by extending the loan from 25 years to 40. 

But by the end of the mortgage the total amount of interest paid will have soared by £112,646 – from £158,089 to £270,735.

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