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Are lenders really offering 40 year mortgages to first-time buyers?

We reveal how often banks actually grant longer-term loans

Around half of mortgage lenders say they offer 40-year mortgage terms, and one has described longer-term loans as ‘the new normal’. But Which? has discovered that these deals still make up a tiny proportion of the mortgage market.

We spoke to all of the lenders offering maximum mortgage terms of 40 years to find out whether they actually grant such long loans to first-time buyers.

Read on to find out whether you could be eligible for a longer-term mortgage, and for advice on choosing the right mortgage term.

  • If you’re buying your first home and need some advice on your mortgage options, call Which? Mortgage Advisers on 0800 197 8461.

New 40 year mortgage launched

The specialist lender Together recently announced it would be extending the maximum term on its mortgage products to 40 years, to aid first-time buyers hoping to get on to the property ladder.

Together, which markets itself as a lender for people struggling to get a mortgage with high street brands, said that lending over longer periods is ‘becoming the new normal’.


Are longer-term deals the next big trend?

People are living and working longer, and high house prices continue to lock many first-time buyers out of home ownership.

Because of this, it’s no surprise that mortgage terms are getting longer. The most recent Bank of England mortgage data (released in Autumn 2017) showed that around one in six mortgages was granted at a term of 35 years or longer, up from one in 15 a decade earlier.

But while 35-year mortgages have become more common, terms of 36 years or above are still relatively rare – despite many banks claiming to offer them.

Data from UK Finance showed that just 4% of mortgage approvals in the first half of 2018 were on terms of 36 years or longer.

And as part of our mortgage satisfaction survey, we found that just 27 out of 3,072 homeowners (0.9%) had a mortgage term of 36 to 40 years, and only eight (0.3%) had a deal lasting 40 years or more.

Are banks actually granting 40-year mortgages?

Though these incredibly low figures suggest 40-year mortgages rarely get approved, 34 lenders claim that they offer them.

We contacted all of them, though only half replied to our enquiries. Of those who responded, the larger lenders were reluctant to provide specific data, but smaller building societies were more forthcoming.

  • Family Building Society told Which? that 1.4% of its approved mortgages in the last year had a term longer than 36 years – with 61% of these approvals for a 40 year term. The age of borrowers approved ranged from 22 to 30.
  • Hanley Building Society said that 4.9% of its approvals since the start of 2017 were for 36-40 year terms, with an average loan-to-value ratio of 84% and an interest rate of 3.18%.
  • Newcastle Building Society said that 12% of its first-time buyer enquiries in 2018 have been for terms in excess of 35 years.

Beverley Building Society, meanwhile, told us that while it has offered terms of up to 40 years for a couple of years, it hasn’t had the demand to actually approve any loans of longer than 35 years.

Which lenders offer the longest mortgage terms?

These responses suggest that lenders are willing to offer 40-year deals, but that first-time buyers may not be aware that they can get a mortgage with such a long term.

The table below shows the maximum mortgage terms offered by different banks and building societies.

A little over half of lenders offer maximum terms of 40 years, while 29 only offer 35-year terms.

Age caps on 40-year mortgages

While this means that 40-year deals might be more readily available than we thought, it’s important to remember that you’ll need to meet certain criteria to qualify.

Lenders put caps on the maximum age you can be when you come to the end of your loan, so in the main, 40-year products are only really suitable for younger buyers.

Lenders use these safeguards because should your circumstances change and you become unable to afford repayments, you’ll find it difficult to extend your mortgage term into retirement.

Clydesdale Bank and Platform both told Which? that they assess 40-year applications with a maximum lending age of 75 in mind, and Clydesdale explicitly confirmed that it won’t offer a 40-year deal to anyone aged over 36.

Scottish Building Society, meanwhile, said that mortgages taking borrowers into retirement ‘may create issues as reliable pension projections that far on the horizon would be difficult to rely upon’.

There are exceptions, however. Ipswich Building Society said it doesn’t impose maximum age limits and instead employ a ‘common sense approach’ to make individual lending decisions.

How expensive are 40-year mortgages?

If you’re in need a mortgage term of longer than 35 years, you’ll be cutting your pool of lenders roughly in half – which could, of course, have an impact on the best interest rate you can get.

The tables below show the cheapest fixed-rate deals (by initial rate) with maximum terms of 40 years that are currently available to first-time buyers.

90% loan-to-value (maximum 40 year term)

At 90% LTV, the cheapest two- and five-year deals by initial rate are both from lenders that offer 40-year mortgage terms, Clydesdale and First Direct.

The links in these tables take you to Which? Money Compare, a comparison site run by Which? Financial Services. Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a mortgage lender before committing to any financial products.

Two-year fix

Lender Initial rate Revert rate APRC Fees
Clydesdale Bank 1.79% 5.20% 4.8% £999
Yorkshire Bank 1.79% 5.20% 4.8% £999
Sainsbury’s Bank 1.84% 4.49% 4.2% £995

Five-year fix

Lender Initial rate Revert rate APRC Fees
First Direct 2.25% 4.19% 3.6% £490
Clydesdale Bank 2.39% 5.20% £999
Platform 2.39% 4.99% 4.2% £1,499


95% loan-to-value (maximum 40 year term)

Buyers with a 5% deposit aren’t quite so fortunate, with the cheapest two-year fixes (by initial rate) from Marsden Building Society* (2.78%) and Yorkshire Building Society** (2.87%), with both only available with 35-year terms.

Two-year fix

Lender Initial rate Revert rate APRC Fees
Leeds Building Society 2.99% 5.69% 5.2% £999
Clydesdale Bank 3.09% 5.20% 4.9% £0
Platform 3.14% 4.99% 4.78% £999

Five-year fix

Lender Initial rate Revert rate APRC Fees
Family Building Society*** 2.99% 5.04% 4.4% £599
Saffron Building Society 3.47% 4.64% 4.3% £0
Clydesdale Bank 3.49% 5.20% 4.6% £0

*Data from Moneyfacts. Accessed 3 October 2018.

How to choose a mortgage term

Just because you might be able to borrow over a longer period, that doesn’t necessarily mean it’s the right thing to do.

As with all borrowing, the right length of the loan will depend on your financial circumstances and your long-term goals.

David Blake of Which? Mortgage Advisers says: ‘In theory, a lender is more likely to approve a mortgage with a term of 40 years on an affordability basis, as the repayments will be lower.

‘That said, borrowing over such a long period will mean the amount of interest you pay – assuming you have the mortgage for the full term – will be considerably more.

‘People who are looking to minimise repayments and maximise borrowing may be attracted by a 40-year term, but others will be put off by the prospect of paying considerably more in interest.’

Whether you pick a 30, 35 or 40-year mortgage term, there are three golden rules you should follow:

  1. If you’re taking out a fixed-rate mortgage, always switch deals before you’re shifted on to your lender’s standard variable rate (SVR).
  2. Choose a mortgage with no penalties for overpayments, allowing you the flexibility to pay it back sooner.
  3. Consider whether now is the right time to buy, or whether saving for a little longer could get you a better rate and shorter mortgage term.

Where to find advice on your mortgage options

If you’re a first-time buyer, you could benefit from advice from a whole-of-market mortgage broker that has experience in dealing with lenders that offer longer mortgage terms.

Which? Mortgage Advisers has processed more than 200 applications for 40-year mortgage terms in this year to date and can offer expert guidance on getting the right mortgage.

For a free call back from an adviser, fill out the form below.

*Revert rate of 6.2%, APRC of 5.71%, Fees of £299
**Revert rate of 4.99%, APRC of 4.5%, Fees of £495
***Mortgages from the Family Building Society involve parents using their own home equity or savings as security.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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