Mon, 02 Jun 2025

Mon, 02 Jun 2025 First-time buyers typically borrowing for 31 years

Mortgage lengths have stayed above 30 years despite some falls in interest rates.

* Average mortgage term for first-time buyers has increased from 28 years a decade ago to 31 years currently.
* Higher mortgage rates have led people to borrow for longer periods to keep monthly repayments low.
* Recent data shows that about two in five new mortgages have terms exceeding retirement age.
* Lenders typically allow mortgage terms up to 40 years, with many first-time buyers choosing long-term loans.
* Average term for a mortgage has not decreased since 2022-23 and is likely to remain high due to affordability challenges.
* First-time buyers who choose longer terms may opt for shorter terms in the future if their salaries improve or they move house.
* UK Finance reports that initial mortgage payments relative to income are still high, with rising house prices offsetting lower interest rates.
* Property completions peaked in March before stamp duty changes took effect, but there has been a significant drop-off since then.
* Mortgage approvals for house purchases decreased for the fourth consecutive month in April, indicating affordability challenges.
* House prices rose by 0.5% in May, following a slight drop in April, and are up 3.5% over the last year, with an average home costing £273,427.
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