What is the longest you can get a mortgage for?In the UK, as it currently stands, mortgages extending past 25 years are generally considered to be long-term. Those of 30-40 years being the longest with now a 40 year maximum stretch. A long-term mortgage such as a 40 year deal may open up more opportunities if you are struggling to get on the property ladder. As it will enable you to borrow more over a longer period and reducing the cost of your monthly payments. A fixed-rate mortgage of this length also means borrowers are provided with more stability. As they are able to ensure their interest rate remains the same for the full term of the loan.
The disadvantages of a 40 year mortgageWhilst your monthly payments may be lower with this kind of mortgage term there are disadvantages to be wary of. A 40 year mortgage will likely cost more in the long run, as you will also be paying interest for longer, equating to a larger overall cost. There is also the likelihood that you may still be paying your mortgage into retirement as a result of the stretched term of payment. Meaning you may need to continue to work for longer than planned.
How do I qualify for a 40 year mortgage?Whilst these kinds of long-term mortgages have now become available in the UK, there are still several factors that may prevent you from being accepted for this type of loan:
- The first of which is age. Caps are being set by many lenders on both the age you will be by the end of your mortgage, along with a maximum age you may qualify for one at. Younger buyers therefore may be more likely to secure a deal.
- Being knowledgeable about your retirement plan may help you succeed in qualifying for a 40 year mortgage. There should be consideration of how to pay for a long-term mortgage beyond retirement. Lenders may want to see you that are paying into a pension fund, and will be able to keep up mortgage repayments past your retirement.