The ’40-year mortgage’: a blessing or a curse?

23 June 2016

Traditionally, first-time buyers have bought mortgages carrying a term of 25 years, but with the ever-increasing difficulty to get onto the property ladder, sales of 30 to 40-year mortgages have shot up.

Many see these longer-term mortgages as the only way to get onto the property ladder, allowing them to buy their dream homes and pay smaller monthly repayments at the same time. 60% of all first-time buyers are now purchasing these longer-term mortgages.

One of the UK's biggest mortgage brokers has warned first-time buyers of the implications of these longer mortgages, stating that the interest payments on these longer mortgages means that they might end up paying tens of thousands of pounds more interest than they would purchasing the traditional 25-year mortgages. 

A typical 40-year mortgage could see a monthly repayment bill of just £716 compared to £948 for a 25-year mortgage, but the interest over that extra 15 years would amount to £60,000.

Mortgage regulations, although stricter, do not regulate the length of the mortgage term itself, and so where a buyer's regular income could not afford them a 25-year mortgage, they are able to obtain a 40-year one, regardless of this extra interest bill.

David Hollingworth, of London & Country Mortgages, suggests buyers keep their mortgages under review and shorten the payback period as soon as they can afford to make higher monthly repayments. 

The above is not legal advice; it is intended to provide information of general interest about current legal issues.

Here at Gepp & Sons we have the expertise to help you with all aspects of the buying and selling process, from residential conveyancing to tax advice. If you are considering buying or selling and would like a full breakdown of all known legal cost please contact our New Business Team on either 01245 343980 or email