What's behind the growing trend of mortgage terms for 30 years plus?
According to the Council of Mortgage Lenders figures for the first quarter of this year reveal a significant increase in applications from borrowers looking for mortgage terms of 30 years plus.
House prices are rising and mortgage affordability checks are making it more difficult for many to get themselves a deal. For many borrowers the solution is to take out a longer term deal to get themselves on the property ladder or move to a new home.
Over 13% of successful new applicants will now repay their loan over 30 years. This figure has almost doubled from 2007 when just over 7% of borrowers took out a deal for 30 years plus.
Why the increase?
The reason for the increase in the number of people looking for a longer mortgage term is the need to reduce month payments. As house prices rise mortgage repayments increase and home-owners find themselves having to paying more to buy a home.
To be able to make a property purchase for many the only solution is to extend the mortgage term. While this means paying more for your home in the long term, in the short term it means being able to climb on the property ladder or move up a rung.
If you would like to purchase a home and need advice as to what type of mortgage is best suited to your needs speak to an adviser at Deal Direct.
We can offer you independent impartial advice and a 'whole of market' search to make your home-ownership more affordable.
Call us today on 0800 048 8828.
