New data shows there has been a 156 per cent increase in the number of older borrowers taking out longer loan terms in the last five years, more than any previous year since 2018.
Those taking out a mortgage for 35 years or more from the age of 36 will be at least 71 when it is fully repaid, meaning there could be an impact on their quality of life in retirement.
However, paying off their mortgage for longer means they will accrue more interest – and will likely end up paying more overall.
“For most borrowers, the opportunity to reduce the term of the mortgage at another time, say on renewal of their rate, will hopefully allow them to bring that end date back inside any potential retirement age.
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Read MoreIn the first nine months of 2024 alone, 22,103 mortgages with a term of 35 years or more were sold to people over the age of 36, according to Freedom of Information data analysed by Quilter.
Karen Noye, mortgage expert at Quilter, said the data “highlights growing concerns about housing affordability, rising interest rates, and changing socio-economic trends”.
The average age of first-time buyers has risen steadily, and the latest data from Mojo Mortgages suggests it now stands at 33 years and eight months old.
This figure might fluctuate over the years depending on interest rate levels, but they would need to be confident they can afford to make repayments until the age of 71 – three years after they can expect to qualify for the state pension, and 14 years after they reach the normal minimum pension age.
Noye adds: “Retirees on fixed incomes may find it challenging to manage mortgage payments alongside other living costs, particularly if they have not accounted for this in their retirement planning.
However, she said longer mortgage terms are not necessarily bad and certain types of mortgage products allow you to make overpayments where possible, helping to decrease the overall term length.
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