Warning issued to thousands born between 1985 and 1995 who have a mortgage

Thousands of homeowners will be paying off mortgages into their 70s as more borrowers over the age of 36 are forced to take out longer loans.
-Credit:Reach Publishing Services Limited


UK households who've taken out 35-year mortgages have been issued an urgent warning. Thousands of homeowners will be paying off mortgages into their 70s as more borrowers over the age of 36 are forced to take out longer loans.

The number of people taking out mortgages with a term of 35 years or more has jumped 274 per cent since 2020. And there has been a 156 per cent increase in people over 36 taking out 35-year mortgages since 2019, according to Freedom of Information data from the Financial Conduct Authority (FCA).

The issue is particularly pertinent to those in their 30s, so born between 1985 and 1995. Karen Noye, mortgage expert from Quilter warns it could trigger "a generation of retirees who are either burdened with mortgage debt well into retirement." In 2020, 5,911 mortgages with a term of 35 years or more were sold to homeowners over the age of 36.

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But in the first nine months of 2024, the number jumped to 22,103. Ms Noye said: "Retirees on fixed incomes will face the burden of managing mortgage repayments alongside other living costs, while those who remain renters will grapple with escalating rental payments that erode their savings and leave little room for a secure and comfortable retirement.

"This generation’s housing affordability crisis threatens to create a profound legacy of financial insecurity." Mr Noye explained that "this makes it unlikely that the state pension alone will cover a mortgage repayment alongside everyday living costs, leaving people reliant on savings".

She said: "One of the biggest advantages of spreading a mortgage over a longer period is that the monthly repayments will be lower than if you opt for a shorter term." A 36‑year-old taking out a £250,000 mortgage with a 35-year term and an interest rate at the current Bank of England base rate of 4.75 per cent would face monthly repayments of £1,145 and would be 71 by the time it is paid off.