The Mortgage Lender says it is in talks with an unnamed lender about developing and launching a 50-year mortgage.
TML says homebuyers will be forced to rethink how they finance their properties as the 10 x salary mortgage approaches.
David Titmuss, managing director of TML, says: “We are in talks with a lender about launching the 50-year mortgage because the combination of pension issues, property prices and longer life expectancy are all working against the traditional 25-year mortgage.
“More and more people are looking at their home as being their pension,
and a 50- year mortgage would effectively become a means for them to
invest and save for 50 years as well as a mechanism for buying their
“There is disarray in the traditional mortgage market, with more
people taking out interest-only mortgages, which effectively means in 25
years time they will still have the original mortgage value to pay off.
“Life expectancy is increasing, and the current teenage generation can
maybe expect to work from around 18 or 20 until they are perhaps 70
years of age. They may well have a further 15 or 20 years in retirement
“Because our market is primarily the growing sub-prime sector, we are
far closer to the issues affecting those on the edge than the mainstream
TMB says more people are falling into sub-prime borrower status, so more
solutions are needed fast.
Titmuss adds: “There is no reason why a mortgage should be restricted to just 25 or 30 years, it is now all about monthly income and ability to pay.
“People are not thinking about the ultimate cost that is something that is
disappearing from our mindset.
“They are thinking about how they can balance their domestic finance
books and live in and own a home while they also enjoy everything that
life has to offer in this day and age particularly leisure time and
“The 50-year mortgage will be the mechanism whereby people can have
their cake and eat it, and enjoy life to the full while knowing their
home is secure.”