Are 40-year mortgages a good idea and who is eligible?
Unsure if a 40-year mortgage is right for you? We can help.
40-year terms are a sure way to make mortgage repayments more manageable by bringing down monthly costs, but are they right for you?
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Which lenders offer longer terms?
At the time of writing, Halifax, Nationwide, First Direct, Lloyds, Tesco Bank and other smaller building societies such as Ipswich and Nottingham were found to offer 40-year terms.
What about older borrowers?
Securing a 40-year loan is not especially difficult, but there are some limitations worth noting.
Borrowers in their mid to late thirties or older will be unable to take out longer deals due to a lender’s maximum age cap. This works as a safeguard to ensure borrowers aren’t likely to experience a change in circumstances, which might leave them unable to afford the repayments as a result.
This means long-term mortgages are mainly limited to first- and second-time buyers.
What about the costs?
While longer-term loans will bring down monthly costs, the additional interest that builds up over time is going to be substantial.
Borrowing over a longer period may give you less outgoings in the short-term, but it doesn’t necessarily mean it’s the right thing to do.
As with all borrowing, the length of the loan you choose will depend on your unique financial circumstances and long-term goals.
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