‘Mortgage crisis will drive more buyers to choose 35-year loans’ – expert

Ray Boulger of big broking firm John Charcol tells The Neg a trend for longer-term mortgages is set to continue as affordability tightens.

First Time Buyers image mortgages

More first-time buyers will apply for mortgages of 35 years or even longer in the next months, according to a leading expert on home loans.

Data from banking trade group UK Finance shows a record number of buyers taking out 35-year mortgages to keep repayment amounts down.

The proportion of FTBs going for the longer-term mortgages was up to 19% in March, more than double the figure for last year. It is also the highest number since UK Finance started collecting the figures in 2005.

Many buyers will still be making payments on their mortgages in their 70s if they keep the mortgage for full term.

Ray Boulger, Senior Mortgage Technical Manager, John Charcol

Ray Boulger, senior mortgage technical manager at brokers John Charcol, told The Neg that 35, 40 or even 45-year mortgages have been a feature in the loans market for some time, and the total is likely to continue rising.

If it means FTBs can manage to buy then I can’t see anything wrong with it.”

“It will become more of a trend as rates go up,” he says. “If it means FTBs can manage to buy then I can’t see anything wrong with it.”

He said buyers could over-pay on their mortgage contributions to clear the mortgage earlier than 35 years and reduce the interest they pay overall as well.

Boulger also says people can transfer to another product with the same lender at the end of a fixed-rate period, and avoid further affordability tests.

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