Over half of borrowers opting for 30+ year mortgage terms

Over half (51%) of mortgage borrowers now opt for a 30-year mortgage or longer, a study conducted by Uswitch and online mortgage advisers Mojo Mortgages has shown.

Related topics:  Mortgages
Amy Loddington | Online Editor, Barcadia Media Limited
17th May 2024
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The firms partnered to uncover how the average mortgage term lengths have changed in the last few years.

In 2021, 41% of mortgage borrowers chose a term of 30 years or longer, however, this increased to over half (51%) last year. From 2021 to 2023, the average mortgage term length for a first-time buyer has increased by 1 year, from 28 years to 29 years.

In fact, an increase in the term lengths has been seen across all residential purchase and remortgage customers, as well as buy-to-let purchase customers.

Remortgaging has seen the biggest increase in average term length: in 2021, the average mortgage term for remortgaging was 21 years, but in 2023, the average mortgage term for remortgaging increased to 23 years, an increase of 2 years.

Kellie Steed, the mortgage expert at Uswitch said:

“According to the Zoopla house price index, the current average property value in the UK is £264,500, which means someone on an average salary (£34,900) would need to borrow more than 7 times their annual salary to take out a large enough mortgage to buy it. The vast majority of lenders cap their lending way below this, at around 4-5 times annual income.

“It’s unsurprising, therefore, that many are resorting to ‘mammoth mortgage’ terms in order to stretch their affordability to the absolute maximum. However, first-time buyers are not the only ones affected. There has been a less significant, but certain increase in average mortgage term lengths across the board since the Bank of England base rate began to rise in December 2021.”

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