The number of first-time buyers who took out 30-year or more mortgages has increased in the second quarter of 2014, as revealed by data from the Council of Mortgage Lenders.
According to its latest figures, out of 79,900 first-time buyers, 22,600 took out mortgages with longer than 30-year terms, which accounted for 28 per cent, compared to 18,200 in the first quarter.
House buyers who took out 30-year or more mortgages face paying more interest, even though monthly payments are lower.
Kevin Hever, financial adviser at Wolverhampton-based Cornerstone Financial, said: “This is the result of the mortgage market review as it was inevitable that terms of mortgage would be pushed up. So when lenders calculated affordability they looked at how much salary goes towards the mortgage. So an increase in years will lower monthly outgoing.”
