Latest News

Are 35-year Mortgages a Bad Idea?

15th August 2017

Traditionally, a typical mortgage lasts 25 years, but over the last two years more people have been taking out longer mortgages. The Bank of England revealed that during the months leading up March 2017, 15.75% of all new mortgages were for 35 years or more. First-time buyers contribute towards 25% of this statistic.

What is it that makes longer-term mortgages an appealing option and what are the pros and cons?

Lower monthly repayments
Many are considering borrowing money over a longer period as this brings down the cost of the monthly repayments. A saving like this is very attractive to many first-time buyers.

For example, if you were buying a property at a cost of £250,000 at a 3% rate and have a 30% deposit, then borrowing £175,000 over 25 years would cost you around £830 per month. By adding five more years, you would decrease the monthly payments to £738, whilst a 35-year mortgage would be just £673 a month. This is a saving of £1,104 or £1,884 each year.

Higher chance of mortgage application approval
Having lower mortgage repayments could increase your chances of your application success. But the main drawback is that lowering your monthly repayments doesn’t necessarily guarantee total savings in the long run…

Save now, pay later
Lower monthly repayments may be a more manageable, affordable way onto the property ladder. But the savings you make will be in the immediate and short term. The longer the mortgage term is, the cheaper the repayments will be as they are spread across more months.

Depending on your situation, you could see yourself burdened with the debt for more years and paying interest for longer, increasing the total cost of the mortgage.

To avoid this, you could overpay your loan or consider remortgaging frequently to obtain lower rates.

Age can be an issue
A longer term mortgage means you’ll be older when you repay it compared to a short term mortgage. This may not be an issue as some mortgage providers have increased the age limit of applicants to 80 years old. But it’s worth keeping in mind that you’re unlikely to be working in your older years, and as a result you won’t have the same income each month.

If you’re looking for the best-suited mortgage to your requirements and would like some sound advice from the experts at IMC then speak to a member of our team today.

Tel: 020 3761 6942
Fax: 020 8392 6112

Return to news page
Gold star Gold star Gold star Gold star Gold star
"We really like the people and services provided at IMC. We've been using them for 6 years and they are incredibly helpful and attentive. Really Great!"

Richard Curen , Nov 2018

Independent review from Google
Gold star Gold star Gold star Gold star Gold star
"Totally recommend
Excellent company to work with, Jacqueline Elliot has dealt with numerous mortgage reviews for us and always reminds us in plenty of time to renew and make the proceeds as easy as possible. Can not recommend highly enough."

LeighM-33 , Dec 2018

Independent review from Yell
Gold star Gold star Gold star Gold star Gold star
"Andrew Francis has just completed a re mortgage for me on a property I own in London. I live in Bournemouth so good communication is really important. Andrew and Jennie have been excellent during what was a protracted transaction due to the additional requirements from the lender and their appointed conveyance solicitors. Despite unhelpful delays by the lender , I felt IMC were always on hand to negotiate on my behalf and bring the transaction to as swift a close as possible. My cousin is an IFA who I'd naturally automatically go to for advice and products but he recommended I stick with IMC as he couldn't better the deal and lenders they had available. I normally begrudge paying a fee to an IFA when I know they will also be paid by the lender but to be fair in this case, they earnt it and some! Thanks guys. I'm now £600 pm better off for the next five years ! 👍🏻😁 Chris Amey."

Christopher Amey , Oct 2019

Independent review from Facebook
Gold star Gold star Gold star Gold star Gold star
"Our mortgage adviser Andrew Francis is brilliant. When we first met him we were first time buyers with very limited knowledge about the process of buying a first home in the UK. However, Andrew guided us through the process with his vast knowledge and professionalism. We had to recently re- mortgage our flat, Andrew got in touch with us well in advance he presented us with the best options for us and made the whole procedure painless. Of course, we were a lot more relaxed this time around, as we already knew that we are in good hands. Thank you for your help, Andrew!"

Vyara Panayotova , Feb 2020

Independent review from Google