Evaluating the Cost of Long-Term Mortgages

  • May 7th 2024

Long-term mortgages may seem appealing due to lower monthly payments, but they come with a hefty price tag in the form of increased interest payments.

Key Insights:

A significant portion of mortgage applicants are now opting for longer terms, with 30–35-year terms being increasingly popular and 67% of mortgages offering up to 40-year terms.

However, extending the mortgage term results in higher interest payments.

For instance, taking out a £250,000 mortgage at 6% interest over 40 years could accumulate £206,000 in interest, compared to £80,000 less over 25 years.

The desire to manage monthly expenses has led many to favour 35 or 40-year terms, with a notable rise in applicants choosing the latter.

Despite the allure of lower initial payments, caution is advised when considering elongated mortgage terms.

Analysing Interest Payments:

Extending a mortgage to 35 or 40 years significantly inflates interest payments, as illustrated by the comparison between 25 and 35-year terms at varying interest rates.

For example, with a 6% fixed rate, a 35-year term could result in £179,000 interest payments, compared to £126,000 over 25 years.

Benefits of Longer Terms:

While longer terms increase overall costs, they may align with affordability criteria, enabling borrowers to access higher loan amounts without hefty deposits.

Other benefits include flexibility for future lump sum payments, support during early career stages, and increased discretionary income for leisure activities.

Factors Driving Preference for Longer Terms:

Escalating house prices relative to earnings has rendered shorter mortgage terms unfeasible for many first-time buyers.

With the current cost of living crisis, saving for a substantial deposit is increasingly challenging, making longer mortgage terms a pragmatic choice for affordability.

Impact on Monthly Payments:

Extending the mortgage term significantly reduces monthly payments, providing short-term relief.

For instance, at a 4% interest rate, monthly payments for a 40-year term are substantially lower than for a 25-year term.


While longer mortgage terms offer short-term financial relief, they entail substantial long-term costs. It's essential to carefully evaluate affordability and explore shorter terms where feasible.


*this is an informative blog and not financial or mortgage advice. Speak to your bank, mortgage broker or financial advisor for advice in what is the best decision for your circumstances.