It’s getting harder to get on the property ladder, and now some first-time buyers are taking a risky gamble – mortgages that stretch for 40 years. New figures from UK Finance show that a shocking 21% of new home buyers are taking out mortgages that last longer than 35 years! That’s one in five people taking their first step on the property ladder, and it highlights a worrying trend.

Why are mortgages getting longer?

The simple answer: affordability. House prices are soaring while wages are stagnant, leaving many struggling to afford a home. Longer mortgage terms mean lower monthly payments, making home ownership seem more attainable.

But what’s the cost?

The longer you’re paying off your mortgage, the more interest you’ll pay overall. This could mean less money for retirement, travel, or other life goals.

Are we heading for a mortgage crisis?

Experts are warning that this trend could have serious consequences. Sir Steve Webb, a former pensions minister, has highlighted that 42% of new mortgages now stretch beyond the state pension age!

He warns that this could leave many people struggling to afford their homes in retirement, and facing a bleak future.

What’s the solution?

• More affordable housing: We need more homes that are affordable for first-time buyers.
• Help for first-time buyers: Government schemes like Help to Buy can help people get on the ladder, but more support is needed.
• Financial literacy: People need to understand the long-term implications of taking out long mortgages.

The bottom line:

While longer mortgage terms might seem like a solution to the affordability crisis, they come with serious risks. It’s time for a serious rethink of how we help people get on the property ladder, before we face a generation burdened by debt.

Key takeaways:

• 21% of first-time buyers are taking out mortgages lasting more than 35 years.
• This trend is driven by the rising cost of housing and stagnant wages.
• Experts are warning of the potential for a mortgage crisis, with people struggling to afford their homes in retirement.
• More needs to be done to make housing more affordable and to help people understand the long-term implications of their borrowing.

Don’t get caught in a mortgage trap! Do your research and seek professional advice before taking out a long-term loan.