Will a 30 year term make your mortgage more affordable?

March 3, 2016 by Brendan O'Neill

Advice & Tips

Despite some of the lowest interest rates now being available, buying a home can still be a challenge for many first time buyers. Rising property prices and stricter regulations attached to borrowing make it much harder for a person to get on the property ladder.

A longer mortgage term is a possibility, with just over half of first time buyers opting for a longer mortgage term during the second half of 2015, according to data provided by the Council of Mortgage Lenders.

One of the main benefits of a 30 or 35 year mortgage term, is that you’ll be able to spread the cost of your mortgage over more time, resulting in lower monthly payments. However, you will repay more in the long term than if you managed to pay the debt off in much less time.

Although it is possible to take out a mortgage over a longer term, it is best to check that the lender is okay with you making regular overpayments when you can afford to. Lenders will still carry out strict affordability tests, and may consider life changing events like pregnancy or redundancy.

The average age of first time buyers is also increasing, especially as it can take even longer to save for a decent deposit. This may impact on the lenders decision of whether to agree to a longer mortgage term, especially if you are likely to be close to retirement age at the end of the term.

There are many considerations when choosing a mortgage, which is why mortgage advisers take CeMAP training courses before offering advice to buyers.