The Growing Trend of 35- and 40-Year Mortgage Terms

In today’s market, it’s becoming more common to see mortgage terms stretching to 35 or even 40 years. This trend can affect everyone from first-time buyers struggling with affordability, to property investors and landlords looking to maximise cash flow, and even clients with complex mortgage needs who require creative solutions.

Lenders are increasingly offering these longer terms to help buyers manage higher house prices and interest rates. In fact, a recent UK Finance report noted that about 22% of first-time buyer loans in mid-2024 had terms of 35 to 40 years. Additionally, most lenders now allow terms up to 40 years (some even 45), reflecting how the traditional 25-year mortgage is evolving to meet modern challenges. 

Mortgage321 understands that these changes can seem daunting. In this blog post, we’ll explain why longer-term mortgages are on the rise, discuss their advantages and disadvantages, and outline how you can use a longer term as a stepping stone rather than a life sentence. Our goal is to provide clear, professional, and approachable guidance – whether you’re a first-timer or a seasoned property owner – so you can make informed decisions about your mortgage strategy.

Why Are Lenders Offering Longer Mortgage Terms?

There are a few key reasons behind the shift toward 35- or 40-year mortgages. Affordability is the biggest driver. Rising interest rates, higher living costs, and soaring house prices have made traditional 20-25 year mortgages harder to afford for many buyers. Lenders and borrowers alike have been looking for ways to reduce monthly payments to pass strict affordability assessments.

One effective way to do this is by extending the mortgage term. By spreading the loan over a longer period, the monthly repayment is smaller, making it easier to fit within a household’s budget and meet the lender’s criteria. This trend has been described as “further evidence of the ongoing affordability crunch” – with incomes struggling to keep up with costs, longer terms help bridge the gap (21% of new first-time buyers stretch mortgage terms for more than 35 years.

Mortgage affordability assessments and stress tests also play a role. Lenders don’t just consider whether you can pay your mortgage at today’s interest rate; they must be confident you could still afford it if rates rise in the future (this is often called a stress test). For some borrowers, a 25-year term results in a monthly payment so high that it fails these stress tests. By offering a 35 or 40-year term, lenders can lower that monthly payment to a level that passes the affordability checks. In short, longer terms have become a tool for lenders to help more people qualify for a mortgage while still lending responsibly. It’s no surprise then that 84% of mortgage products on the market now permit a 40-year term, up from 57% just two years ago, lenders have adjusted their offerings to meet this new reality.

Advantages of a Longer Mortgage Term

Opting for a longer mortgage term can offer several advantages that make homeownership more attainable and financially comfortable, especially in the early years:

• Lower Monthly Repayments: The most immediate benefit is a smaller monthly payment. Spreading your loan over 35 or 40 years can significantly reduce the amount you pay each month compared to a 25-year term. This can be a game-changer for first-time buyers on tight budgets or landlords looking to ensure rental income covers the mortgage. For example, on a £200,000 mortgage at 5.5% interest, extending the term from 25 years to 40 years could lower the monthly payment by around £196. This reduction provides breathing room in your monthly finances, making it easier to keep up with payments and other expenses.
• Increased Borrowing Potential: Lower monthly payments can sometimes enable you to borrow more than you could on a shorter term. Lenders determine how much you can borrow based on what you can afford to repay each month. By decreasing the required monthly payment, a longer term might allow you to meet the affordability criteria for a higher loan amount – which could be the difference that lets you purchase your desired property. As one expert noted, taking a longer term can help someone “stretch to the required mortgage level” needed for a more expensive home. This can be particularly useful for buyers trying to break into high-priced markets where a standard-term mortgage wouldn’t stretch far enough. 
  
• Breathing Space for Your Budget: With smaller mortgage payments, you’ll have more flexibility in your monthly budget. This can make it easier to handle other costs of homeownership (like maintenance, insurance, or service charges) and to absorb financial changes such as rising utility bills or unexpected expenses. For landlords and property investors, a lower repayment can improve cash flow, meaning the rental income should comfortably cover the mortgage and possibly leave more surplus each month. This financial buffer can reduce stress and give you greater stability as you manage your property or portfolio.
  

By offering lower payments and potential for increased borrowing, longer mortgage terms provide a useful affordability tool. They can be the difference between getting on the property ladder or not, and they can help experienced buyers balance their monthly finances more effectively. However, these benefits come with important trade-offs that need to be weighed carefully.

Disadvantages of a Longer Mortgage Term

While a 35- or 40-year mortgage can ease the month-to-month pressure, it also comes with some significant disadvantages. It’s crucial to understand these drawbacks before committing to a longer term:

• Higher Total Interest Paid: The flip side of paying your loan back more slowly is that you’ll pay much more interest over the life of the mortgage. Because the debt is outstanding for longer, the interest has more years to accrue. Over 35 or 40 years, this can add up to tens of thousands of pounds in extra costs. For instance, in the scenario mentioned earlier (a £200,000 loan at 5.5%), choosing a 40-year term instead of 25 years would result in paying roughly £126,000 more interest in total. Even a broker’s rough estimate found almost £100,000 extra interest on a £200k loan when extending to a four-decade term. This is money that doesn’t go toward building your equity – it’s purely an added cost. In short, the longer the term, the more you pay back overall, which means the house will cost you a lot more by the time you finally own it outright.
  
• Slower Equity Buildup: In a longer term mortgage, in the early years most of your payment goes towards interest and very little towards the principal loan balance. That means it takes longer to build up equity (the portion of the home you truly own). If property values don’t rise much, having paid down only a small fraction of your balance after, say, 5 or 10 years could leave you with limited equity if you need to sell or refinance. Slower equity growth can also affect your ability to remortgage to better deals in the future or to withdraw equity for other purposes. Essentially, you are in debt for longer, which can delay reaching other financial goals.
  
• Longer Debt Commitment (Less Flexibility): A 35-40 year term means you could be paying off your mortgage well into your older years. If you take out such a loan in your late 20s, it might not finish until you’re in your 60s or 70s. This raises concerns about carrying mortgage debt into retirement when your income might drop. Lenders are mindful of this – they will assess whether you can afford the mortgage if the term extends past your expected retirement age. In many cases, lenders set an upper age limit or require evidence of how you’ll keep paying (for example, pension income) if the mortgage runs into retirement. From the borrower’s perspective, having a mortgage for an extra decade or more can limit your financial flexibility. The longer you have to make payments, the less free income you may have in those years for other priorities, like investing or contributing to your pension. It could also constrain life choices – you might feel less able to reduce working hours, change careers, or take time off, knowing you have a large ongoing commitment. In sum, you’re committing to a debt for a much longer period, which can reduce your ability to adapt to life changes down the line.
  

It’s important to weigh these disadvantages against the benefits. The appeal of a lower monthly bill is real, but so are the costs of carrying a mortgage for longer. You’ll pay more in the long run, and you’ll be in debt longer. The good news is that choosing a longer term now doesn’t mean you’re locked in for the full 35 or 40 years. Next, we’ll discuss why a longer term doesn’t have to be permanent and how you can maintain flexibility in your mortgage planning.

A Longer Term Isn’t Necessarily Permanent – Review Regularly

One crucial thing to remember about 35- or 40-year mortgages is that you do not have to stick with that same term for the entire duration. In practice, very few people will keep the exact same mortgage for four decades. Most first-time buyers, for example, move house or remortgage well before their mortgage’s full term is up. In other words, the term length you start with is often a product of what you need right now to get approved and manage payments – it can be revisited later as your situation evolves.

Initial Fixed Periods: When you take a mortgage, especially if it’s a fixed-rate deal, it typically comes with an initial benefit period (for example, a fixed interest rate for 2, 3, or 5 years). At the end of that initial period, you’ll usually have the opportunity to review your mortgage. This is an ideal time to assess your term length. If your financial circumstances have improved – perhaps your income has gone up, or you’ve paid off other debts – you might choose to remortgage to a shorter term or a better rate. Reducing the remaining term (say from 35 years to 25 years left) will increase your monthly payments, but it can save you a lot of interest and ensure you become mortgage-free sooner. Many borrowers initially opt for a longer term to pass affordability tests, with every intention of adjusting that term downward at the first opportunity when it’s affordable to do so.

Mortgage Flexibility and Overpayments: Even before a formal remortgage, some flexibility exists. Most mortgage deals allow some level of overpayment each year (often up to 10% of the balance without penalty). If you find yourself earning more or with extra cash, you can use that to chip away at the principal loan. Overpaying effectively shortens the loan duration and reduces total interest, without officially changing the term. This can be a smart way to manage a long-term mortgage more aggressively when you’re able, and it gives you control over how long you actually take to pay off the loan.

The key point is that a 35-40 year term at the outset is not a life sentence. Think of it as a means to an end: it helps you buy the property now, but you can and should revisit your mortgage plan at regular intervals. We recommend reviewing your mortgage with a specialist at least at the end of any fixed-rate period (and sooner if your circumstances change significantly). You might find that you can refinance to a new product with a shorter term, or make other adjustments to align your mortgage with your current goals. Remember, life changes – your income could rise, you might receive a windfall, or conversely you might need to adjust payments downward. Keeping the term under review ensures you’re not paying a 40-year mortgage simply by default.

The Value of Specialist Mortgage Advice (How Mortgage321 Can Help)

Navigating longer mortgage terms and knowing when to adjust your strategy can be complex. This is where specialist mortgage advice is invaluable. At Mortgage321, we pride ourselves on being experienced and trusted problem solvers for all kinds of mortgage scenarios – from straightforward first-time purchases to the most complex cases. Our advisors have seen it all: clients needing to extend terms to pass an affordability test, landlords juggling multiple properties, self-employed borrowers with unique income patterns, and more. We understand that every client’s situation is different, and we’re here to guide you through the options with a reassuring, professional hand.

Here’s how working with a specialist broker like Mortgage321 can benefit you:

• Personalised Guidance: We take the time to understand your financial situation, goals, and any challenges you face. If a longer term mortgage is necessary to make your purchase possible, we’ll explain why and ensure you’re comfortable with the plan. We’ll also map out what that means for your future, so you have a long-term game plan (for example, aiming to shorten the term later or planning overpayments when feasible).
  
• Access to Suitable Lenders: Not all lenders are the same. Some mainstream banks might have strict criteria or lower age limits that could limit your term, while other lenders (including specialist ones) may be more flexible. Mortgage321 has access to a broad panel of lenders, including those who cater to niche needs – whether you require a 40-year term, have a complex income, or are investing in buy-to-let. We can match you with the right lender and product to solve your specific problem, even if it’s outside the norm.
  
• Ongoing Support and Remortgage Reviews: Our service doesn’t stop at getting your first mortgage. We remain a resource for you throughout the life of your loan. As your circumstances change, we encourage you to check in with us. For example, when your fixed rate is nearing its end, we can review your mortgage and see if switching to a new deal (perhaps with a shorter remaining term or a better interest rate) makes sense. This ongoing relationship means you’ll always have expert advice on hand to adjust your mortgage strategy. We’ll help you reassess your options and potentially save money or time on your mortgage whenever opportunities arise.
  
• Peace of Mind: Above all, consulting with a specialist gives you confidence. Mortgages, especially in tricky situations, can be stressful. By having Mortgage321 in your corner, you gain the assurance that a knowledgeable professional is looking out for your best interests. We aim to simplify the process, answer all your questions in clear terms, and handle any complexities behind the scenes so you can focus on your new home or investment. Knowing you have a trusted advisor to turn to can make the journey of homeownership far less overwhelming.
  

Mortgage321’s experience with longer terms and specialist cases means we’ve likely helped someone in a situation just like yours. We’re proud to be a trusted partner for our clients, finding solutions when others might see only roadblocks. Whether you’re trying to make that first step onto the property ladder, expanding your property portfolio, or dealing with unique financial circumstances, our team is ready to guide you through the mortgage maze – 25 years, 40 years, or anything in between – and onto a path that suits your life.

Conclusion:

Longer mortgage terms of 35 or 40 years have become an important option in today’s lending landscape. They can open doors for buyers and provide breathing space in tight budgets, but they also mean a longer commitment and greater interest costs. By understanding the pros and cons, and by reviewing your mortgage regularly, you can use a longer term to your advantage without being stuck with it forever. And remember, you’re not alone in this process – professional advice is available to help you make the best choice and adapt over time. Mortgage321 is here to assist with tailored expertise and a problem-solving approach for even the most complex mortgage needs.

Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Individual circumstances vary – always consult with a qualified financial adviser or mortgage professional before making decisions about your mortgage.