What are the Maximum Mortgage Terms?

In this article, we’ll explain the maximum mortgage term, why this could be beneficial and how, with the help of an experienced broker, you can boost your chances of getting a longer term for your mortgage.

What’s the longest mortgage term available in the UK?

Most mainstream lenders, including HSBC, Barclays, NatWest, and Santander, now offer standard capital and interest repayment mortgages with terms of up to 40 years.
A handful of specialist mortgage lenders, such as LiveMore and Hodge, offer retirement interest-only (RIO) mortgages with no maximum term.

The average mortgage term in the UK is 25 years, and while a few lenders would be reluctant to offer an agreement longer than this, a growing number are considering applications for term lengths higher than this.

Why get a mortgage with a longer term?

Mortgage terms typically range from 25 to 30 years, with some lenders allowing terms up to 35 years. Longer terms result in lower monthly payments but higher overall interest, while shorter terms mean higher monthly payments but less interest paid over the loan’s life.

This can be useful for anyone who wants to keep their outgoings to a minimum to help them save or have money freed up for other financial commitments. In these cases, a mortgage term of 30-40 years could be viable, as long as you don’t mind the idea of staying in your current property or having a mortgage to pay for several or more decades.

The main caveat of a longer mortgage term is that it usually costs more in the long run. This is because you will need to make interest and capital payments for the term, and an extra 5-15 years of them are likely to add up despite the reduced cost of those lower monthly mortgage payments.

If you’re interested in knowing how changing your term will affect your mortgage payments, use our mortgage repayments calculator below to compare different term lengths.

How to get a mortgage with a longer-term

During the mortgage application process, your lender will discuss the term length with you and allow you to request an agreement over 25 years. However, there’s no guarantee that your lender offers longer mortgage terms, which can be risky.

You’ll need to find the right lender for this. The first time since being declined because a mortgage provider is unwilling to offer a longer-term agreement can leave marks on your credit report and potentially jeopardise any future finance applications.

If you need a mortgage agreement over 25 years, your best bet is to speak to a mortgage broker. They have access to the entire market and will know exactly which lenders offer 35-year mortgages, 40-year mortgages and longer deals for retired people.

How a mortgage broker can help you

A mortgage broker can help you get a longer-term mortgage by doing the following…

• Searching the entire market for every deal with a longer term than 25 years
• Matching your needs, age and personal circumstances to a longer-term mortgage deal and make sure you’re introduced to the right lender, first-time
• Explain the full implications of a longer-term mortgage to you and discuss potential alternatives to rest assured that you’re making the right decision.
• Negotiating with the lender on your behalf to make sure you get the best rates
• Guiding you through the application and giving you a hand with the paperwork

How age affects your term

The eligibility criteria for a longer-term mortgage differ from those for a standard term. Still, some mortgage lenders are likely to place more scrutiny on your age if you’re looking for an agreement that runs for longer than 25 years.

The mortgage provider will be mindful of the loan into your retirement years. Most people’s income decreases at this point, so your lender must be confident that you can afford your mortgage payments in retirement.

A few lenders won’t offer you a mortgage if the term runs past your 70th birthday, and many of them draw the line at 75. There are, however, other mortgage providers who will have no issue with the term running past your 80th or even 90th birthday, and a small minority who will lend with no such age restrictions, under the right circumstances.

Moreover, there is a range of retirement mortgage options, such as retirement interest-only mortgages (RIO), for people who can’t qualify for a longer-term mortgage due to their age.

Extending the length of an existing mortgage

It’s possible to extend the term of an existing mortgage by refinancing with your current mortgage lender or remortgage with a new one. Whether you’re eligible for a term extension is very much at the lender’s discretion. They will reassess your affordability and eligibility to check whether anything has changed since you took on the original debt.

Some lenders won’t approve you for a term extension if…

• You’ll be a certain age at the end of the term (70-90, depending on the lender)
• You’re more than a month in arrears on your mortgage payments
• You have an interest-only or a part-and-part mortgage
• The property is currently being let
• You have a guarantor mortgage
• It’s a leasehold property with less than 50-55 years left on the lease
• The total mortgage term doesn’t extend beyond the lender’s limit

To extend the term of your mortgage, you could contact your current lender to see whether you’d qualify for this, but a better alternative would be to talk to a broker first. They can search the entire market to find out whether there’s a better deal for you, in which case you could secure a more extended agreement and a superior interest rate, too.

Is it a good idea to extend it?

For some people, it might be. If, for example, you’ve had to take a pay cut and are struggling to afford your mortgage payments, agreeing to a term extension could bring down the amount due each month and make the debt more manageable. It could also be beneficial if you need to make some savings or simply want more disposable income in the immediate term.

There are significant caveats to keep in mind, though. You’ll be saddled with your mortgage debt for longer, but let’s think about the full implications: paying interest over a longer period means paying more for your mortgage overall.

Some lenders will also allow you to change your term back to a lower term should your circumstances change or you deem it the right choice.

It’s important to consider that the overall cost will be higher and ask yourself whether you’re happy with this due to lower monthly payments.

Can you shorten an extended mortgage once you’ve taken it out?

Yes, it’s possible. However, a mortgage lender will want to conduct a thorough affordability assessment of your income and outgoings to ensure you can comfortably afford the new mortgage repayments – which will be higher if you reduce the overall term.

The main benefit of reducing your term is that the interest you pay overall will be lower. If you can comfortably meet your monthly repayments, then this could be the right option for you.

How much will it cost?

You may need to pay remortgage fees if you’re refinancing to extend your mortgage term. They can vary from person to person and lender to lender, but you can find a complete overview of the potential charges in our article on remortgage costs and fees.

Extending an interest-only mortgage

This is sometimes possible at the lender’s discretion, and some people choose this option as a stop-gap solution if their repayment vehicle has faltered and the end of the term is drawing near. For more information, see our article on extending an interest-only mortgage term.

Maximum term on a buy-to-let mortgage

Most buy-to-let mortgages have a maximum term length of between 25 and 35 years, but some mortgage providers offer them a term of 40 years, subject to the maximum age limit that borrowers can be at the end of the agreement.

Extending your term

This can be more difficult as not all mortgage lenders will allow it, especially if there’s any doubt about your investment property generating rental income for an extended period. However, with the help of a broker who specialises in buy-to-let mortgages, your chances of finding a lender who will let you remortgage onto a longer-term deal could greatly increase.

Your application to extend your term will be assessed against the standard criteria, subject to age restrictions. You’re unlikely to be approved if the total term exceeds 40 years.

Get matched with an expert mortgage broker today

If you plan to take out a longer-term mortgage or extend it, it’s a good idea to speak to a mortgage broker. Not all mortgage lenders offer agreements over 25-30 years, and some have age restrictions you might fear.

With the help of the right mortgage broker, though, you can avoid these pitfalls and rest assured that you’ll be introduced to the ideal lender the first time.

We offer a broker matching service that will consider your needs and circumstances to match you with the advisor who’s best placed to help. Call 0330 818 7026 or make an enquiry, and we’ll set up a free, no-obligation chat between you and them today.