Recently released data indicates that mortgage terms of 30 years or more are now becoming increasingly common, as more people are trying to

cut the cost of monthly repayments.

As house prices rapidly increase, existing home owners and first time buyers are forced into considering longer term mortgages. Although borrowing over an extended term may result in lower mortgage payments initially, the total amount repaid will increase by thousands. A report from the Mortgage Advice Bureau states that more people are searching for long term mortgages, despite being warned of the dangers involved. Over a fifth of property buyers are looking for a term of 30 years or more, in comparison to only 8 per cent last year.

The Mortgage Advice Bureau head of lending, Brian Murphy, said:

“Homebuyers are tearing up the rule book by searching for longer term mortgages to secure cheaper monthly repayments.”

He added that tens of thousands of pounds in interest may be added to the total cost of the loan, just by extending a mortgage term to 30 years, rather than the typical 25 years. Other fears are that a person may not be able to meet the mortgage repayments once they have retired, and may not even live long enough to clear the debt. The number of people moving home and searching for mortgage terms of 30 years or more, has doubled since 2010.

Before signing up for a longer term mortgage, it is advisable that home buyers seek the advice of a CeMAP qualified mortgage adviser to ensure they have the most affordable solution for their requirements.

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