It is estimated that more than fifty percent of the mortgages that are available to home buyers in the UK now have more than forty years term limit. But that was not always the case in the past. It used to be a third of mortgages about five years ago. The standard mortgage terms, according to data from Moneyfacts, an independent mortgage monitor, is approximately twenty-five years. But competition has made companies to extend the mortgage terms. This was done to make borrowers be able to meet their monthly repayments schedule and also to meet the strict affordability requirements that such mortgages require. It was seen from the data that the number of mortgages that were at a maximum term of 25 and 30 years were decreasing while those with terms of 40 years and above are now increasing. Along with extending mortgage terms, borrowers are also extending the age at which a borrower can be when his mortgage ends. The age limit is now being extending to 75 years which did not use to be the case some years ago.
Key Takeaways:
- Independent monitoring agency for mortgages, Moneyfacts.com, states that after some years ago only some mortgages had such terms that were very long for their customers.
- Mortgages businesses are making it more better for borrowers and they do this by extending the terms of their mortgages so as to reduce the monthly payments.
- Mortgages with 25 years maximum terms have fallen sharply in recent years between march 2014 and today and are now accountable for only 2.47 percent of residential products.
“Over 50 per cent of all mortgage products available to home buyers in the UK currently have a standard maximum term of up to 40 years.”