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Share of mortgages with 30+ year terms rises to nearly two-fifths – UK Finance
The proportion of mortgages with terms of 30 years or more rose to 38 per cent of all loans in June, the highest share since March this year.
According to figures from UK Finance obtained by Mortgage Solutions, this accounted for 23,069 mortgages in June up from 21,105 in May.
The share of mortgages with terms of 30 years or more has crept up by one percentage point every month since March when this was at 35 per cent and accounted for 22,315 loans.
Rising house prices and interest rates have resulted in buyers finding ways to stretch affordability, often by extending the term of a mortgage to spread out and reduce the monthly payments.
House prices near £300,000
House price indices during the summer months have shown average values are now nearing £300,000 just over 18 months since the average UK house price broke the £250,000 barrier for the first time.
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At the same time, the increasing base rate as part of the Bank of England’s attempt to control inflation has been partially passed on to mortgage borrowers. This has led to average mortgage rates exceeding four per cent for the first time in nearly a decade.
Some prospective buyers are putting purchase plans off altogether, with data from Aldermore suggesting three-quarters were delaying getting on to the housing ladder because of increased expenses.