When you’re taking out a mortgage, you can choose the period you want to repay the loan over. Choosing the right mortgage term could help you balance your finances both now and in the future. Read on to learn more about four key areas you may wish to consider.
Traditionally, first-time buyers took out a mortgage with a 25-year term. As younger generations face affordability challenges, increasing numbers are opting for longer terms.
According to a BBC article published in June 2025, the average first-time buyer now chooses a mortgage term of 31 years, compared to 28 years a decade ago.
It isn’t only first-time buyers who might need to consider the mortgage length. You may also want to review your options when you move home or remortgage.
With some lenders now offering mortgages with terms of up to 40 years, deciding which is the right length for you could be important. Here are four things to consider.
1. Your planned retirement date
Your retirement might seem like a long way off, but it may affect the maximum mortgage term you can choose.
Many lenders require the mortgage term to end before you retire. So, it might be worth thinking about when you plan to stop working. Some lenders also impose a maximum age limit for mortgage applications. This varies between providers. A mortgage adviser could help you assess which lenders are likely to approve your application if this is relevant to your circumstances.
Alternatively, some lenders will approve a mortgage after your planned retirement date if you can prove you’ll have enough income to meet the repayments.
2. Your current outgoings
The length of the mortgage term will have a direct effect on your outgoings now. The longer the term, the lower your monthly repayments will be.
For example, if a first-time buyer takes out a repayment mortgage for £250,000 with an interest rate of 4%. If you choose a 25-year mortgage term, your monthly repayment would be £1,319.
If you want to reduce your outgoings now, you might opt for a mortgage with a 40-year term. In the above scenario, this would lead to your repayments falling to £1,044.
A longer mortgage term could therefore provide flexibility if you need to manage your short-term finances.
3. The total interest you’ll pay
While a longer mortgage term might provide a financial boost now, it could mean paying significantly more in interest over the lifetime of the mortgage.
Using the same scenario as above – a £250,000 repayment mortgage with an interest rate of 4% – a 25-year mortgage term would result in you paying around £145,000 in interest in total. Extend the mortgage term to 40 years, and the total interest paid jumps to around £250,000.
If you’re considering your finances from a long-term perspective, a shorter mortgage term may be the more cost-effective choice.
Remember, you don’t need to stick to the initial mortgage term you choose. You can review it each time you take out a new mortgage deal. As a first-time buyer, you might opt for a longer mortgage term but reduce the term in the future as your financial situation improves.
4. If you need financial flexibility
If your income fluctuates, opting for a longer mortgage term could help you manage months when your earnings are lower. You could make mortgage overpayments to reduce the total interest you pay and how long you’re repaying the mortgage. In many cases, you can overpay up to 10% of the outstanding balance each year before you need to pay an early repayment charge. However, this varies between lenders, so it’s a good idea to check your paperwork before making an overpayment.
Contact us for help searching for your next mortgage
Whether you’re a first-time buyer or a homeowner, we can help you search for your next mortgage. With our expert advice, we’ll work with you to find a mortgage that suits your needs and offer guidance throughout the process. Please contact us to arrange a meeting.
Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
