The days of an average mortgage term stretching to a maximum of 25 years may soon be over, as an increasing number of lenders look to extend the time needed to repay your mortgage in full to cater to the needs of a diverse group of would-be homebuyers.
And now the Government could help to meet this end even further, after it was revealed that they have closed a loophole which barred buyers from taking out a mortgage of more than 25 years this week.
Homeowners and first-time buyers using the Help To Buy scheme – where the Government gives a 20 per cent (up to 40 per cent in Greater London) equity loan towards the cost of a new build home to purchase their properties – could now find it easier to take out a 35 year mortgage.
The news has come as part of a raft of policy announcements from Housing Secretary, Robert Jenrick, which could also see those buying homes via the shared ownership scheme being able to ‘staircase’ (buy further shares in their home) using 1 per cent increments, rather than the standard 10 per cent.
Commenting on the shakeup – which is expected to come into effect in 2020 – Mr Jenrick said:
“Building the houses this country needs is a central priority of this Government.
“We know that most people still want to own their own home, but for many the dream seems a remote one.
“My mission is to increase the number of homes that are being delivered and to get more young people and families on to the housing ladder, particularly those on lower incomes.”
Continuing, he explained that the above was just the tip of the iceberg when it came to the potential extent of future housing reforms. He added:
“I will be looking at ensuring young people from Cornwall to Cumbria aren’t priced out of their home areas and how we can build public support for more house building and better planning.
“This Government will help a new generation to own their home.”
Will you benefit should either of the above changes become a reality?