Content Writer
Mortgage Advisor & Director
Affordability is a big part of getting a mortgage, so it’s important to understand all of the tools at your disposal when it comes to securing affordable repayments. Aside from interest rates, one of the major factors that determine the cost of your mortgage repayments is the length of your mortgage term.
We look at what the maximum and minimum mortgage terms are in the UK, and what factors affect the term lengths you’re eligible for.
How long is a typical mortgage term?
The average mortgage term in the UK has increased in the past decade, from 25 years, to around 30 years. However, they can be both shorter or longer than this, depending on the type of mortgage and the customer’s circumstances.
Although not in every case, commercial mortgages, for example, tend to be shorter than residential mortgages. Because cost is a big factor in why people opt for longer mortgage terms, it’s also likely that you’ll find longer average mortgage terms in the south of the UK, where house prices are higher.
What are the maximum and minimum term lengths in the UK?
The maximum term for a standard mortgage varies between lenders, but most offer a maximum term of between 30 and 40 years. That said, criteria can be stricter when you’re looking at mortgage terms longer than 25 years. Lenders may reduce the LTV (loan to value) of your borrowing if you apply for a longer than average term.
At the other end of the scale, the shortest mortgage term that you’re likely to be offered is around 5 years. Keep in mind, however, that even on a relatively small mortgage, the repayments are likely to be substantial if the mortgage term is very short. For example, if you borrow £100,000 over 5 years at 4% interest, the repayments would be £1842,00 per month.
Factors that affect the term you qualify for
There are several factors that determine the length of the mortgage you qualify for, but age is the main one. This is simply because the older you are, the less time you have to repay your loan. Most lenders are more cautious if the mortgage term is likely to take you into retirement, as income generally becomes lower and less stable than it is for a working age person.
Each has their own rules for the maximum age an applicant can be at the end of a mortgage term, and some also have a maximum age on application. So, for example, the maximum mortgage term for a 50-year-old will be 25 years where the lender’s maximum age at the end of the mortgage term is 75. If the applicant is 25, however, it’s more likely that they will qualify for a 40-year mortgage term.
However, there are some specialist lenders that have no age limits at all, which can be very helpful for older applicants looking for a longer mortgage term. Older borrowers could also consider retirement interest-only (RIO) mortgages, which don’t have a maximum term length.
How term lengths affect mortgage payments
The average UK property currently costs around £300,000. If we use 4% as a typical interest rate, this is how the mortgage term length will influence the monthly repayments:
|
Term length |
Monthly repayment at 4% interest |
|
10 years |
£3,037 |
|
15 years |
£2,219 |
|
20 years |
£1,818 |
|
25 years |
£1,584 |
|
30 years |
£1,432 |
|
35 years |
£1,328 |
|
40 years |
£1,254 |
How to get a longer or shorter term
Deciding what length of mortgage term fits your needs is an important part of the mortgage application process. Whether your goal is to achieve maximum affordability with a longer term, or have repaid your mortgage by a certain age or life event using a shorter term, the key is to find the right lender and mortgage for your circumstances.
As lender criteria varies so much when it comes to term minimum and maximum term lengths and maximum ages, it’s helpful to speak to a broker. This is especially true if you’re looking for a mortgage longer or shorter than the average term of 25-30 years, as not all lenders will be able to accommodate you. Brokers like us, on the other hand, have access to the entire market, including specialist lenders that are not available directly to the public.
You can compare the latest mortgage rates for long and short term deals below, or choose the option to begin a free, no-obligation chat with a broker who can do it all for you:
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UK mortgage lenders’ term lengths
The table below shows the maximum and minimum term lengths for some of the UK leading mortgage providers - please note that these are subject to change.
|
Mortgage Lender |
Maximum Term Length |
Minimum Term Length |
|
40 years |
No minimum |
|
|
40 years |
5 years |
|
|
40 years |
5 years |
|
|
40 years |
3 years |
|
|
40 years |
2 years |
|
|
45 years |
5 years |
|
|
35 years |
5 years |
Changing the term length on an existing mortgage
If you already have a mortgage, it’s possible to extend your term length when you remortgage, assuming you still meet the lender’s criteria based on the new term length and repayments. If your existing lender isn’t able to help, you could also consider lenders with more flexible criteria around age and term lengths.
Finding a lender willing to extend your existing mortgage is another thing we can help you with as brokers experienced in this area.
Buy-to-let mortgage term lengths
If you’re looking for a buy-to-let mortgage you’ll likely find that shorter mortgage deals are easier to come by, but mortgages longer than 25 years are less readily available. However, it’s not impossible to secure a longer mortgage on a buy-to-let property.
If you already have a buy-to-let mortgage, it can be more difficult to extend the term when you remortgage than on a residential mortgage. Again, however, it’s not impossible with the right lender. It’s always recommended that you speak to a mortgage broker if you’re looking for a term length that falls outside of the typical.
Why choose Teito for your mortgage needs?
At Teito we’re keen to ensure that your mortgage fits you, so finding a lender that is able to offer the ideal term length is part of what we do. As well as searching the entire market for a lender with terms that match your criteria, we’ll also go through the calculations with you to ensure you are fully aware of how shorter or longer mortgage terms will impact your repayments and affordability.
Other people looking for longer or shorter than average mortgage terms came to Teito because:
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We provide a service that’s rated 5 stars across leading review sites
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You can compare the latest rates and deals for free
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Your first consultation is always free with no obligation
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Our brokers can access exclusive deals you might not access individually
Ready to compare the latest long and short-term mortgage rates for free and take advantage of a free, no-obligation chat with a whole-of-market mortgage broker? Get started here.
FAQs
There are a number of reasons you might need a longer mortgage term, but it usually comes down to affordability. Whether you’re looking to increase the budget to buy a home, or reduce the repayments on a home you’ve fallen in love with, spreading out the cost over a longer period will inevitably reduce the monthly payments.
Do keep in mind, however, that a longer term means that you’re paying interest over a longer period of time, so the amount you repay overall will be larger, the longer your term.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.