Chat with us, powered by LiveChat Q: How long are mortgages for? - London Mortgage Partners

We’re often asked, how long are mortgages for?

The length (term) of the mortgage varies by case and depends on factors such as the age of the oldest applicant, desired retirement age of the applicant, anticipated pension provisions and the chosen monthly payment budget.

Below are some important criteria elements to consider which may impact your mortgage term.

One of the main considerations is the maximum mortgage term which lenders will grant you, most lenders offer a term between 35 to 40 years in length.

Younger first-time buyers tend to want to stretch the mortgage term to assist with affordability and budgeting, however, an older borrower may in some cases look to shorten the term if it’s possible within their budget, to be mortgage free earlier than they initially thought.

The longer the term is, the cheaper the monthly payments become, however, the overall interest paid on your mortgage will be higher, it’s important to find the right balance here.

The next main consideration is the age limits which lenders will have in place.

With the increase in life expectancy and the increase in the age to which people are working to, most lenders will allow for a maximum age of between 70 to 75 years of age, at the end of the mortgage term.

Please note that if you exceed your chosen retirement age, or sometimes the state retirement age, the lender may ask to see pension provisions in place and to use the forecasted pension income towards your mortgage affordability, instead of your earned income.

When declaring a retirement age beyond the state retirement age, it is important to consider the overall plausibility of your job and if it can feasibly be carried on to that age, for example, lenders may accept someone with a desk-based role going beyond the age of 70 but may not agree that a roofer could work to 75 due to the physicality of the job.

It’s important to speak to an adviser to talk through your short-, medium- and long-term plans so you can receive tailored advice.

We always recommend a review of your mortgage term when you approach the end of your current fixed period or have a general review with your adviser, as the term can be adjusted at this stage to match up with your plans and budget.