Is a 40-year mortgage bad for your wealth?
For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Half of home buyers would consider a 40-year mortgage in a bid to keep their monthly repayments affordable and get onto the property ladder sooner, according to data from Santander Mortgages, which calculates that extending the term by 15 years could mean the average monthly repayment falls by more than £260. In fact, it claims that pitching for a 40-year deal, rather than a 25-year term, could help 3.25 million more first-time buyers get onto the property ladder. Take out a 25-year term mortgage for a total of £150,000 at 2.5 per cent, and your monthly repayments will be somewhere around the £795 mark. “Although taking a longer-term could see homeowners have debt for longer, lenders will ask questions around extending the life of the mortgage into retirement to ensure it will remain affordable, especially for those getting closer to retirement age,” adds Hollingworth.
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