Long mortgage terms saving borrowers money

August 4, 2025 by Brendan O'Neill

Borrowers

Property Market

Surveys and Statistics

Mortgages that come with lengthy terms of repayment offer a more affordable option for many first-time buyers, according to the latest analysis that has just been released.

Moneyfactscompare crunched the data, looking at how much can be saved each month by borrowers who pick mortgages with 40-year terms. The company compared this with the situation for someone who is on a 25-year mortgage. The amount borrowed in both cases was £250,000 and the mortgage rate was 5.05%, which is the current average. What the results show is that the borrower on the 40-year deal would be paying out £255 per month less.

The data also reveals that borrowers on the longer mortgage would have the option of cutting their repayment term by overpaying. This would still not leave them facing a higher payment amount every month, like those on the 25-year deal. If they paid an extra £200 each month, they could cut the 40-year term by close to 13 years, while still saving over £123,000.

Rachel Springall works for Moneyfactscompare as a finance expert. Talking to Financial Reporter, she said that mortgages with long terms of repayment offered a more affordable option for those buying a first home.

She then went on to add that:

“However, those monthly savings come at a cost, and borrowers with lengthy mortgages will make monthly repayments for longer and incur paying considerably more mortgage interest overall, so making overpayments to reduce the term and interest incurred is wise.”

That is the sort of insight that a professional advisor with the CeMAP qualification may offer.