More than half of mortgages on the market can be stretched out over 40 years

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More than half of mortgages on the market can be stretched out over 40 years



MORE than half of mortgages on the market can now be taken out for up to 40 years, after a surge in longer loan availability.
Traditionally, homeowners have been able to stretch repayments to a maximum of 25 years, but 51 per cent of residential mortgage products currently have a standard upper limit of four decades.
Getty – Contributor Over 50 per cent of residential mortgages now offer a 40-year maximum term
That marks a 40 per cent rise from just five years ago, when the proportion was just over a third (36 per cent).
It comes as people are working longer and may also have larger mortgage debts, following house price surges in recent years.
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Darren Cook, of advice site Moneyfacts.co.uk, which carried out the analysis, said that by extending a mortgage, borrowers may be looking to reduce their monthly repayments.
However, he warned this could mean a far higher bill overall, as well as being stuck paying off the loan well into retirement.
For example, someone borrowing £200,000 over 25 years at a rate of 2.5 per cent may pay £69,169 in interest but over 40 years, total interest could be £116,588 — an extra £47,419.
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