Data collected by Moneyfacts shows that the number of residential mortgages which have a maximum term of 40 years is rising.
In the last five years, the number of available mortgages of this type has increased from 1,096 to 2,604, going from making up 35.93 per cent to 50.89 per cent of the residential mortgage market.
Furthermore, the figures show that within the same time frame, the quantity of mortgages with a 35-year term has also risen, from 1,118 to 2,221 – from comprising 36.66 per cent to 43.40 per cent of the market.
Meanwhile, the number of residential mortgages with 30- and 25-year terms has decreased in the last five years.
The latter has fallen from 606 to 140, representing a decline from 19.87 per cent to 2.74 per cent of the residential mortgage market, and the former has decreased from 230 to 152 – from 7.54 per cent to 2.97 per cent.
Additional data collected by Moneyfacts shows that 71 per cent of all residential mortgages can end when the borrower is 75, whereas five years ago this figure stood at 52 per cent.
Moneyfacts finance expert Darren Cook comments: “Historically, a standard mortgage term generally amounted to a period of 25 years. By extending their mortgage term, borrowers may be looking to reduce their monthly repayments and therefore are more likely to meet strict affordability requirements.
“It also appears that mortgage providers are permitting extended maximum mortgage terms of up to 40 years in conjunction with extending the maximum age that a borrower may be at the end of a mortgage.
“A longer-term mortgage may reduce the monthly repayments of a mortgage, however, the additional interest that accumulates over an extended mortgage term could be considerable.”