The last two years have seen an increase in the number of first-time buyers taking out long-term mortgages. Some of these are as long as thirty-five years, which will take the homeowners well into retirement. 

However, we can see how these longer-term mortgages can help people get onto the property ladder, and boost the property marketing generally. 

In this blog, we look at the pros and cons of mortgages that you might still be paying off into retirement, and what this means for the property market.

We’re estate agents, not mortgage brokers, so we can’t give mortgage advice. If you are looking to take out a mortgage, always talk to your bank, building society or mortgage broker first to get the right advice for your particular circumstances. 

Why are first-time-buyers choosing thirty-five year mortgages?

The biggest appeal of a thirty-five-year mortgage is that they mean lower monthly mortgage payments. By stretching out payments over thirty-five years instead of twenty-five, each monthly payment is less. At a time when the cost of living is high, everyone is looking to save where they can. A monthly payment on a thirty-five-year mortgage is less than a monthly payment on a shorter mortgage, and usually a lot less than rent. 

It is usually the promise of lower monthly payments that drives buyers to take out thirty-five-year mortgages. But taking out these mortgages could be a gamble as well. 

What are the downsides of a thirty-five-year mortgage?

Taking on a mortgage that you will still be paying off when you’re in your seventies could mean that you don’t get the retirement you’ve dreamed of. It could mean that you have to keep working beyond retirement age, or use your pension to meet your monthly mortgage repayments. 

Some homeowners are probably hoping to pay it off early with overpayments in future, or switching to a different deal. Again, there are risks with this because you cannot know if either of these will be possible. But then again, any mortgage is a risk.

Lastly, paying off a mortgage over such a long period usually means that you pay more interest overall. 

What do thirty-five-year mortgages mean for the property market?

As estate agents, we are always pleased to see developments in mortgages that mean more people can buy property. This is good news for buyers and good news for the market. 

Property – particularly in Guildford and the Home Counties – is a relatively secure investment because prices continue to rise. Owning property with affordable mortgage repayments is more secure for you and your family than renting is. It also gives you an asset to leave to your children, or something to be cashed in if you need to pay for residential care in future.

Making property ownership available to more people is good news for anyone wanting to sell their house too, because it increases the number of potential buyers. This makes the property market more buoyant and should help you sell your house quickly and for the right price. 

Sell property in Guildford

If you have property to sell in Guildford, we’d love to hear from you! Cobbles are an independent estate agency with extensive property experience and local knowledge. Explore our site to find out more, or get in touch on 01483 457 000. 

Disclaimer:

Before you take out a mortgage, always talk to your bank, building society or mortgage broker. They will give you up-to-date advice and detail all the pros, cons and risks of taking out a mortgage of any length.