As interest rates rise, one in five first-time buyers are taking out mortgages over the age of 35, according to industry figures.
A record 19% of first-time buyers aged at least 35 took out a mortgage in March, trade association figures showed. UK Finance display
This is the highest ratio on record since April 2005.
A year ago, in March 2022, less than one in 10 (9%) first-time buyers were taking out a mortgage for over 35 years.
In 2005, when records began, this ratio was only 2%.
The ratio reached double digits in June last year, when it hit 10%, and has been climbing steadily.
Longer mortgage terms can make monthly payments more manageable, but borrowers may end up paying more in interest.
Extended mortgage terms can also affect some borrowers’ plans for retirement.
Mortgage rates have risen as the Bank of England’s base rate has risen.
Swap rates, which underpin fixed-rate mortgages, have recently fluctuated amid inflation expectations. There was also a jump in mortgage rates last autumn as a market reaction to the mini-budget.
Many existing homeowners have yet to feel the pain from rising mortgage rates, as they are currently sitting on fixed rate contracts. Some may experience payment shock when they finally remortgage.
A survey of 2,000 people by opinioncarried out for Hargreaves Lansdowne In May, it found that almost half (48%) of those with a mortgage said they would struggle if their monthly repayments rose by £150.
Sarah Coles, head of personal finance at Hargreaves Lansdowne, said: “Anyone who bought after the rate hike of the late 1980s hasn’t had to deal with rises at such a pace before, so they won’t have the risk. have included it in their plans.”
Borrowers who are worried about struggling to make their mortgage payments should speak to their lender as soon as possible to discuss their options.
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