View more on these topics

Lenders start to offer long-term mortgage offers

MoneyExpert.com research shows that nearly a third of lenders offer maximum mortgage terms of 40 years or more.

Lenders only offering maximum mortgage terms of 25 years are being replaced by long-term offers. Only 23% of the 126 mortgage lenders and products analysed by MoneyExpert.com limit maximum terms for mortgages to 25 years.

Tesco is offering mortgages with a maximum term of 52 years. First Direct offers a maximum 47-year term, while HSBC and Alliance & Leicester offer 40 years.

Borrowers taking out a 25-year repayment mortgage at 6% would pay 644.29 a month, while the same loan over 40 years would cost 550.21 a month, which is a saving of 94 a month. However, over 25 years they could pay up to 93,000 in interest compared with 164,100 over 40 years.

Sean Gardner, chief executive at MoneyExpert.com, says: It makes sense that lenders are responding by offering greater flexibility to borrowers whether it is by allowing them to borrow more or by enabling to spread payments over a longer time. The old model of three times salary and a mortgage lasting 25 years maximum is on the way out.

It can be a good idea to spread payments over a longer period of time if that makes monthly repayments more affordable. However borrowers need to be aware that the longer they have a mortgage for the more they will pay in interest.

Recommended

High time regulators cracked down on the PPI rogues

From Sara-Ann Burgess If the payment protection insurance market has not woken up yet, then the alarm bells should be ringing so loudly that even Mr Van Winkle would struggle to get a good night’s rest. In the past fortnight there have been a number of significant events which will hopefully act as precursors to […]

Assureweb in cover tie-up with HLP

Assureweb has linked up with HomeLoan Partnership to offer its members access to exclusive life protection products. Assureweb will provide a protection panel for HLP’s chosen provider partners, AXA, Bright Grey, BUPA, Friends Provident, Legal & General, Liverpool Victoria, Norwich Union, Scottish Equitable and Scottish Provident. Stephen Wynne-Jones, director of sales and marketing at Assureweb, […]

Online marketing is vital for small brokers

Online marketing is a vital tool for brokers, especially as it allows small businesses to compete on a level playing field with their larger rivals.

BM defends product transfer policy

Despite criticism of its retention policy from rivals, BM Solutions says it is set to complete over 500m worth of product transfers by the end of 2006. BM Solutions has come under attack in recent weeks for encouraging brokers to be lazy by offering them enhanced proc fees to recommend product transfers rather than remortgages. […]

Health - thumbnail

Absence management systems gone AWOL from UK’s SMEs, reports Jelf

A quarter (23 per cent)* of the UK’s small to medium-sized enterprises (SMEs) do not have an absence management system in place, according to new research from Jelf Employee Benefits. Despite 69 per cent* of organisations having a system in place, three-quarters (75 per cent) report that it is not providing them with sufficiently empowering absence or health data to inform an effective wellbeing programme.

Newsletter

News and expert analysis straight to your inbox

Sign up