The Council of Mortgage Lenders has released data showing that more and more home buyers are choosing a mortgage term of up to three decades, in an attempt to secure their place on the property ladder.
April to June 2014 saw one in five new loans with a term of 30 years or more, but this figure was even higher amongst first-time buyers, at 28 percent.
Generally, the standard term for a mortgage is 25 years and, only 10 years ago, fewer than five percent of borrowers chose to take their mortgage over a longer term. The soaring property prices of current times – coupled with the fact that the average first-time buyer is now in their 30s as opposed to their 20s – means that for many, a longer term is seen as the only option.
Also, following the Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review, which saw the Financial Conduct Authority impose more stringent financial checks, some feel it has made the extended term route the only option to succeed in owning a dream home.
While borrowing over a longer term will reduce monthly payments, it also means that it will cost more overall to repay the debt, as the interest is being charged over a longer term.
The vast number of changes that the mortgage market has encountered means there are a number of options available to homebuyers. Many choose to seek the guidance of a mortgage professional who has undertaken the relevant CeMAP training, to ensure they get the best advice and most suitable deal.
