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'Marathon' mortgages lasting up to 40 years are becoming more popular, as cash-strapped first-time buyers try to boost their chances of getting on to the property ladder.
But while borrowing for longer might reduce your repayments in the short term, you could end up paying tens of thousands of pounds more in interest and potentially face financial struggles in retirement.
Here, we explain the pros and cons of 40-year mortgages, plus who qualifies for these longer-term loans.
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While 25-year mortgage terms were once commonplace, a growing number of first-time buyers are now taking out loans with terms of 35 years or longer.
Between December 2021 and August 2023, the Bank of England base rate increased from 0.1% to 5.25%, pushing up the cost of borrowing.
Before the first rate rise, 9% of first-time buyers were taking out mortgages lasting 35 years or more. By the time the base rate peaked, this figure had more than doubled to 20%, according to UK Finance data.
Lenders have been facilitating this trend by increasing their maximum borrowing ages and offering longer maximum terms on their mortgage deals.
Our analysis of Moneyfacts data shows more than 8 in 10 fixed-rate mortgages on the market are available with terms of up to 40 years.
The longer your mortgage term, the lower your monthly repayments will be.
The scenario below assumes you're buying a home for £250,000 with a 10% deposit, and are taking out a two-year fixed-rate mortgage at 4.86%.
In this example, the monthly repayments on a 40-year mortgage would be £124 less than a 30-year term, and £52 less than a 35-year term.
| Mortgage term | Monthly repayment during the first two years |
| 25 years | £1,297 |
| 30 years | £1,188 |
| 35 years | £1,116 |
| 40 years | £1,064 |
There's a significant catch. Put simply, if you opt for a longer term, it'll cost you a lot more.
Using the example above, someone taking out a 40-year term would theoretically pay £156,000 more in interest than somebody with a 30-year term.
This is only a rough indication. It assumes that at the end of the two-year fixed term, you stay on your lender's standard variable rate for the entire mortgage term.
In reality, you'd be strongly advised to switch deals regularly. This means the overall interest you pay will depend on what is happening to mortgage rates and the equity you have in the home each time you come to remortgage.
There are other downsides, too - most notably the threat of negative equity.
This is when you owe more on the property than what it's worth (due to the property value going down), and people with 95% mortgages are most at threat.
On a longer-term mortgage, you'll be paying off very little of the actual loan in the first few years, with the majority of your payments going towards interest.
This means that if house prices fall, you could be vulnerable to negative equity. This can also make it harder for you to move up the property ladder.
For some first-time buyers, a 35 or 40-year mortgage might be the difference between being able to buy a home or needing to rent for longer.
But just because you've taken out a marathon mortgage, that doesn't mean you'll need to stick to such a long term.
As you build up equity in the property, you'll be able to remortgage at a lower loan-to-value. This will open you up to better mortgage rates and potentially the opportunity to reduce your term.
Another option - as impossible as it may seem right now - is to make overpayments on your mortgage as and when you can. Most lenders allow you to overpay up to 10% of your balance a year fee-free.
The maximum mortgage term you will qualify for depends largely on your current age and planned retirement age.
Mortgage lenders set maximum age limits for when the loan will need to be fully repaid. As shown in the table below, the biggest lenders allow you to borrow up to the age of 70, 75 or 80.
There are some variables. For example, Halifax will allow you to repay your mortgage using employment income up to the age of 75, but it may take into account your projected retirement income up to the age of 80.
In recent years, lenders have been increasing the age limits on their mortgages, meaning longer terms which were once only available to the youngest borrowers are now open to more people.
| Maximum age limit | Lender |
| 70 | Barclays, NatWest, Royal Bank of Scotland |
| 75 | Coventry Building Society, Nationwide, Santander, Virgin Money |
| 80 | Halifax, HSBC, Lloyds Bank, Yorkshire Building Society |
42% of new mortgages granted in the last quarter of 2023 are due to go beyond the borrower’s projected state pension age, according to Bank of England data. This is a significant increase on the 31% recorded in 2021.
The data was obtained via a freedom of information request by the pensions consultant Sir Steve Webb, who estimates that more than a million such mortgages have been granted in the last three years.
Webb says: ‘We already know that millions of people are not saving enough for their retirement and if some of that limited retirement saving has to be used to clear a mortgage balance at retirement they will be at even greater risk of poverty in old age.’
Webb has raised concerns that some borrowers will need to raid their pension savings to clear their mortgage, leaving them less to live on in old age.
He says that in the past, most people had paid off their mortgage before pension age, allowing them to spend their remaining working years boosting their pension savings. Now, however, the risk to retirement savings will depend on what happens over the course of the borrower’s career.
This highlights the importance of making savvy financial decisions over the course of your mortgage term. This includes making overpayments when you can afford to or knocking some years off the term of your loan when you come to remortgage.
Whether you're just doing some initial research or are ready to make an offer on a property, we're here to help.
Our guides on the main types of mortgage and how much deposit you'll need can help you get your head around the basics of home loans.
If it's time to compare deals, see our advice on the best mortgage rates and find out who comes top in our table of the best mortgage lenders.
If you're ready to start the process of getting a mortgage, see our tips on how to apply for a mortgage.
This story was originally published in February. It was last updated in May to reflect new statistics showing the numbers of people taking out a mortgage lasting into retirement.
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