The Mortgage Lender managing director, David Titmuss, claimed there was no reason why a mortgage should be restricted to 25 or 30 years, and that a 50-year loan was entirely possible and practical. The firm is currently developing a mortgage that will have a 50-year term, arguing that a combination of rising property prices and longer life expectancy were working against the traditional 25-year mortgage model.
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Titmuss claimed that the firm was currently in negotiations with a lender to develop a formulised 50-year mortgage, and argued that there were already 50-year mortgages in place as people who purchased property when they were in their 20s would still be making payments 40 or 50 years later. He said the development would help people reduce their monthly repayments and help new buyers get on to the property ladder.
Kent Reliance BS has also introduced a home loan that allows repayments to be passed from parents to their children, which allows a longer term loan to be taken out without fear of the repayments needing to be paid up after the borrower passed away. So although the long term as an initial loan is not common, there are other options which fit the time criteria.
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Elizabeth Smith, mortgage adviser at Money Plus, commented: “If it will help affordability and keeps payments lower then I can understand it, but I don’t see the benefits in a longer mortgage term. The question of how well it would sell is also an important consideration.”
