New Freedom of Information (FOI) data from the Financial Conduct Authority (FCA), analysed by Quilter, reveals an enormous rise in the variety of folks aged over 36 taking out mortgages with a time period of 35 years or extra.
In 2024, 30,338 mortgages with a time period of 35 years or extra have been bought to folks aged over 36.
Over a five-year interval since 2019 there was a 251% enhance in the variety of older debtors taking out longer mortgage phrases. And there has additionally been a 56% enhance in the variety of debtors aged 31-35 taking out these prolonged loans.
As Quilter points out this shift displays broader affordability challenges in the UK housing market. High property costs and elevated rates of interest have made month-to-month repayments tougher to handle, prompting many debtors to prolong their mortgage phrases.
For lenders, longer phrases may also assist extra candidates meet affordability standards, particularly as wages haven’t saved tempo with the price of residing.
The development towards longer mortgage phrases amongst older debtors highlights deeper structural points. These embrace delayed homeownership, restricted housing provide, and the rising hole between earnings and housing prices.
While longer phrases might ease short-term monetary strain, in addition they underscore the necessity for broader reforms to enhance housing affordability.
Quilter mortgage skilled Zara Bray commented:
“The leap in older debtors choosing ultra-long mortgage phrases highlights simply how stretched affordability has turn out to be however doesn’t essentially want to be considered negatively. Given the vast majority of mortgages are supported by a mortgage adviser, it is a optimistic instance of recommendation enabling prospects to stay in their houses throughout tough macroeconomic circumstances.
“Extending your mortgage previous retirement age could also be a wise lever to pull in the brief time period, permitting different property to stay invested.”
