The figures show that 40-year mortgage products stand at 2,782, up from 2,412 products (55.55%) this time last year.
Darren Cook, finance expert at Moneyfacts.co.uk, said “Historically, a standard mortgage term generally amounted to a period of 25 years, but a growing majority of products are now available to be extended for a period of 40 years. By extending their mortgage term, borrowers may be looking to reduce their monthly repayments and therefore are more likely to meet strict affordability requirements.”
“Yorkshire Building Society is the latest mortgage provider to increase its maximum mortgage term criteria to 40 from 35 years, at the same time increasing its criteria on the maximum age of a borrower at the end of a mortgage from 75 to 80 years.”
“It appears that mortgage providers are permitting extended maximum mortgage terms of up to 40 years in conjunction with extending the maximum age that a borrower may be at the end of a mortgage. Our recent research shows that more than four-fifths (83%) of residential mortgages can end when the borrower is 70 years of age or older.”
“A longer-term mortgage may reduce monthly repayments, however, the additional interest that accumulates over an extended mortgage term could be considerable.”