Number of 35-year mortgage terms up 156% in 5 years

More people now carrying a mortgage into later life

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The way people approach mortgages is changing, with older borrowers increasingly opting for longer loan terms. But what does this mean for their ability to save for retirement and manage their finances in later life?

According to Quilter, the number of people aged 36 and over taking out mortgages lasting 35 years or even more has skyrocketed – up by a staggering 156% over the past five years.

Between January and September 2024, over 22,000 such mortgages were sold, the highest number since 2018. Back then, the figure stood at just over 15,000. That contrasts with 2020, when there were around 5,900. This sharp rise paints a picture of how financial pressures and evolving lifestyles are reshaping homeownership.

Quilter’s mortgage expert Karen Noye points out that these trends are driven by rising house prices, higher interest rates, and shifting societal norms. 

“The continued rise in property prices has made it increasingly difficult for buyers, particularly those entering the market later in life, to afford homes without significantly extending the repayment term,” she explains.

The financial challenge of carrying a mortgage into retirement

Let’s think about what this means for retirement. A 36-year-old taking out a 35-year mortgage will still have repayments hanging over their head at age 71, which is beyond retirement age for most people. 

Quilter highlights the potential financial strain: assuming a £250,000 mortgage at today’s Bank of England base rate of 4.75%, monthly repayments would be about £1,145. That’s a big chunk of income for someone likely relying on a pension.

Noye comments: “Retirees on fixed incomes may find it challenging to manage mortgage payments alongside other living costs, particularly if they have not accounted for this in their retirement planning.”

“Furthermore, longer mortgage terms mean borrowers pay significantly more in interest over the life of the loan, increasing the overall cost of homeownership. For many, this could erode their ability to save for retirement or meet other long-term financial goals.”

How equity release might help

For some people entering retirement with an outstanding mortgage, equity release could offer a lifeline in this situation. If you’ve already paid off most of your mortgage but still have a lingering balance, equity release is one way to clear that balance, and potentially raise additional cash for other expenses. 

Because a lifetime mortgage (the most common form of equity release) requires no monthly repayments, it frees up the borrower’s income for other essential costs in retirement.

That said, there are trade-offs with equity release, just as there are with long-term mortgages. Perhaps most significantly for many people, it can reduce the inheritance you leave for loved ones. That’s because the loan and accrued interest will be paid back via the sale of your home when you pass away, or move into long-term care.

It’s essential to understand the pros and cons of equity release before taking things further. You should also think carefully before securing other debt on your home.

Balancing other options: overpaying and downsizing

Other options might also be worth considering. Overpaying on your mortgage when you can afford to could help reduce the term and cut down the total interest paid. Some mortgage products even allow for flexible overpayments without penalties. Downsizing is another alternative, especially if you no longer need as much space and want to free up some equity.

Karen Noye reminds us that stretching your mortgage term is not always a bad thing, provided you approach it wisely. 

“A financial planner can help you find the best mortgage product for your circumstances and consider your finances in the round to ensure you have the flexibility to overpay should you wish to,” she says. “At the same time, they can help you plan for a comfortable retirement with the finances available to afford your mortgage repayments.”

The key takeaway is that planning ahead and seeking professional advice from a mortgage expert, equity release adviser or general financial adviser is crucial. After all, retirement should be about enjoying life, not juggling financial stress.

Explore your equity release options

If you would like to know more about unlocking a tax-free cash lump sum from your home to pay off your existing mortgage and boost your finances, call us on 0808 178 3055. We’ll arrange a free, no-obligation appointment and equity release advice from one of our selected advisers who will confirm whether you are eligible. 

If you’re unable to talk now, request a call back and we’ll call when it’s convenient for you. 

Source

156% rise in borrowers opting for longer mortgages: Older borrowers taking out longer loan terms increases 156%: Quilter. Mortgage Finance Gazette. Accessed 30 January 2025.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn