Over half (51%) of mortgage borrowers have chosen a term of 30 years or more in the past year, Uswitch has found.

In partnership with online mortgage adviser, Mojo Mortgages, the firm revealed that the number of mortgage borrowers choosing these long-term products has increased from 41% in 2021.

It was found that across all residential purchase and remortgage customers, as well as buy-to-let (BTL) purchase customers, the average term length has increased between 2021 and 2023.

For first-time buyers, the average term length has increased by one year to 29 years in 2023, while the average term has also increased from 25 years in 2021 to 26 years in 2023.

Furthermore, average term lengths for remortgages and BTL purchases now stand at 23 years (21 years in 2021) and 24 years (23 years in 2021) respectively.

Mortgage expert at Uswitch, Kellie Steed, said: "According to the Zoopla house price index, the current average property value in the UK is £264,500, which means someone on an average salary (£34,900) would need to borrow more than seven times their annual salary to take out a large enough mortgage to buy it. The vast majority of lenders cap their lending way below this, at around 4-5 times annual income.

"It’s unsurprising, therefore, that many are resorting to ‘mammoth mortgage’ terms in order to stretch their affordability to the absolute maximum. However, first-time buyers are not the only ones affected. There has been a less significant, but certain increase in average mortgage term lengths across the board since the Bank of England base rate began to rise in December 2021."

Uswitch has said that there are some positive reasons for a longer-term mortgage, such as aiding affordability and in the case of remortgaging, it could reduce monthly outgoings, or potentially allow for borrowers to remortgage, where rate hikes have impacted affordability.

However, the longer the mortgage term, the more interest is paid, and it also increases the likelihood of repaying the mortgage into retirement.

Steed added: "With mortgages, the shorter the term, the less interest you’ll pay overall, no matter what interest rate you’re able to get. For example, even in the days of 1% mortgage interest rates, paying 1% interest over 35 years will clearly result in paying more than 1% interest over 25 years.

"That said, interest rates are typically in the region of 4-8%+ these days, depending on your circumstances and the mortgage type, so that additional 10 years of repaying interest will make a much more significant difference in what you pay overall.

"In some cases, waiting until you can manage a shorter mortgage term may allow you to save money overall. However, life isn’t usually straightforward and waiting won’t be an option for everyone. It’s a good idea to seek advice from a mortgage expert, however, when determining the pros and cons of taking out a very long mortgage term. They’ll be able to assess your individual circumstances and recommend your best way forward, whether you decide it’s best to wait or not."

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