A record number of first-time buyers are taking out 35-year or longer mortgages as Britons sign-up for a life of debt.
Data from UK Finance, quoted in The Telegraph, shows that nearly a fifth of all loans taken out by first-time buyers in March were for terms of 35 years or longer.
This represents the highest proportion since records began in 2005 and more than double the 9% rate seen in December 2021, when interest rates were as low as 0.1%.
The average age of a first-time buyer is 32, according to Halifax, meaning many buyers will be making repayments well into their 60s.
“In order to lower monthly payments and, thereby, improve their affordability calculations, we have seen customers increasingly take out mortgages over longer terms, an option still permitted by most lenders and also within the [City watchdog’s] responsible lending rules,” UK Finance told The Telegraph.
Figures also suggest that existing homeowners are taking out longer-term deals to help them cope with soaring imortgage interest rates, which have ballooned to 4.5% as the Bank of England aims to stay on top of inflation.
Some 8% of home movers are taking out 35 years or longer mortgages compared with 4% in December 2021.
Interest rates are often hiked when inflation is high to increase borrowing costs and essentially discourage customers from spending, forcing sellers to lower their prices.