Buying a property is one of the life's major milestones. But while turning the key on your new home can be an exciting experience, it can also be an expensive one, with the cost of mortgage payments, bills, general maintenance and more soon adding up.
More advice for buyers: First-time home buyer guide – how to get on the property ladder for the first time
Now a new analysis by high street bank Santander has revealed that would-be homeowners are increasingly willing to take a big step to mitigate one of these key costs. Their research found that nearly half of buyers would consider taking out a 40-year mortgage in order to get a foothold on the property ladder, extending the traditional mortgage term (25 years) by 15 years.
Examining how this decision would impact monthly mortgage costs, they found that an average monthly repayment for a 25-year mortgage falls by £263 when spread over 40-year-period.
The bank’s findings also revealed that a 40-year mortgage could help a staggering 3.25 million more first-time buyers secure their starter home. Despite this fact, further figures from Santander's research reveal that nearly a quarter (23 per cent) of homebuyers are unaware that spreading a mortgage over a longer term would result in lower monthly repayments.
But of those in-the-know almost a quarter (23 per cent) who would consider getting a 40-year-term would seek to re-mortgage to a shorter-term if their financial situation improved, while a fifth (18 per cent) would do the same once they moved to a new house.
Commenting Miguel Sard, Managing Director of Mortgages at Santander UK said: 'The possibility of owning a property may seem like a distant dream to some aspiring buyers, many of whom have found themselves locked in a ‘rent trap’ and unable to get onto the property ladder.
'By offering buyers the option of a longer-term mortgage, our aim is to address some of the affordability restrictions they face and support them in buying a home with more manageable monthly repayments.'
Santander has extended its mortgage terms to up to 40 years, though this is only available for those aged 35 and under. Other lenders offering maximum mortgage terms up to 40 years include the Halifax and Nationwide, according to Which?
It's important to note that while a longer mortgage term can reduce monthly repayments, it will also increase the amount of interest you pay overall.
Related: Self-employed mortgage guide – how to get on the property ladder when you work for yourself
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