Teachers has extended its maximum mortgage term from 35 years to 40 years in order to improve the affordability of its products.
The building society’s move is designed to bring down the monthly mortgage costs for people buying a home in an era of high house prices and with the cost of living increasing.
It follows feedback from intermediaries working in the new build sector, where the 40-year term has helped buyers purchasing via the Help to Buy equity loan scheme.
Buyers looking to take up the 40-year term have access to the full range of mortgages from Teachers, subject to lending criteria, with the maximum age of lending – 83 – remaining unchanged.
Household finances have been hit by rising inflation due to the weakening pound following the Brexit vote, pushing up the cost of living.
Paul Clifford, IFA at East Sussex-based Clifford Osborne, said: “The difference of five years, I think, would make very little difference at all [to affordability].
"The building society benefits because interest is charged for five years longer.
“It is a good idea if it helps people get on the ladder, but when they come to remortgage I think they would look to restructure the whole deal and bring the term back in line with something more reasonable.”