In the UK, the maximum term for a mortgage is 40 years. A longer term for a mortgage often translates to lower monthly repayments in proportion to the amount borrowed. However, the total amount repaid in such scenarios is usually higher in the long run.

Typically, mortgages with repayment periods longer than 25 years are considered extended mortgages in the UK. Although, the maximum permissible mortgage term is usually 25 years. Various lenders now offer mortgages that exceed this 25-year limit, with the longest readily available mortgage term currently being 40 years.

It is important to note that the mortgage term and the mortgage deal are two separate factors. The mortgage term represents the duration required for the repayment of the loan, assuming no overpayments are made. Meanwhile, the mortgage deal, which usually lasts between two to five years, is a period of stable or favourable interest rates at the start of the mortgage term.

At the end of the deal period, borrowers opt to remortgage to another deal or lender. However, the mortgage term extension during the remortgaging process is subject to conditions that vary with lenders. Some may insist on running checks on applicants before extending their mortgage term, while others may have a maximum age limit.

For instance, if the mortgage term goes into the retirement age of the borrower, they will need to prove they will earn a stable pension income by the time the loan is due for repayment, or they may not be eligible to extend the term.

Monthly repayments

A longer term mortgage means your monthly payments will be cheaper as it is payable over a longer period of time. This also means that you will accrue more interest on the balance of your mortgage due to the term being longer, this is something to take into consideration when weighing up your options as you will pay back more in the long run.

Opting for an extended mortgage initially and later shortening it by remortgaging can also be regarded as an alternative option. This choice appeals to borrowers whose circumstances are likely to improve in the future as their income increases, or if they inherit money. Thus, it allows for higher repayments that significantly reduce the total amount repayable over time.

Mortgage lender

The mortgage provider will run some checks on your affordability before accepting or declining your application as they have to be sure you can afford the mortgage you are looking to apply for. They will also assess your credit report for any other financial commitments you may currently have, as your term length will depend on your affordability and the eligibility criteria that you meet.

In summary, when applying for a mortgage, the length of the term is a crucial factor to consider. Borrowers should note that the mortgage term and the mortgage deal are separate entities that are subject to different terms and conditions. It is wise to seek professional advice and choose an option that best suits individual circumstances.

An independent mortgage broker here at LTC Mortgages will discuss your options with you and will advise if longer term mortgages are suitable for your personal circumstances.

Contact us today at 0151 662 0188 or email [email protected]