30 Year Mortgages Explained
More people than ever are opting for 30 year mortgages rather than the traditional 25 year term. We look at why, how much it costs you in the long run, the advantages and disadvantages and whether you're eligible to help you decide what's best for you.
What is a 30-year mortgage?
A 30 year mortgage is a home loan which you repay over three decades. The 30 years refers to the mortgage term. It is the total time you will borrow the money for and the number of years you will make repayments for until the debt is cleared.
For decades, most homeowners in the UK have had a 25-year term on their mortgage. However, longer-term mortgages of 30 years or more are becoming increasingly popular. Sales of these longer mortgage terms rose by 13% in 2023, according to data collected from the Financial Conduct Authority by Bowmore Financial Planning.
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Should I get a 30 year mortgage?
Thirty-year mortgages are becoming increasingly popular because of rising house prices and interest rates. A longer mortgage term reduces your monthly repayments as the debt is spread over more years which makes the mortgage more affordable day to day. However, it also means you’ll pay more interest over the life of your mortgage.
In other words, your monthly repayments on a 30-year mortgage will be cheaper than on a 25-year mortgage with the same interest rate. That’s because the capital you owe is being divided by 360 months rather than 300.
Let’s say you borrow £400,000 on a five-year fixed rate mortgage at 5%. If you opt for a 25-year mortgage term your monthly repayments would be £2,339. However, the same deal with a 30-year mortgage term would have monthly repayments of £2,148, saving you £191 a month. Not hard to see why they are becoming more popular as soaring interest rates and the cost-of-living crisis bite.
But while you’ll be spending less on your mortgage day to day, in the long term you could end up paying significantly more interest on your home loan.
Let’s take the example above again. If you opted for a 25-year term on that mortgage you’d pay £191 more a month but over the length of the mortgage you would repay £701,762. Someone who opted for a 30-year mortgage term would pay less each month but over the life of the mortgage would pay £71,580 more interest.
The pros and cons of a 30 year mortgage
If you are weighing up whether to get a 30 year mortgage, it’s important to consider all the pros and cons before you decide. That’s everything from lower monthly payments to paying more interest or owning your home faster vs. avoiding the risk of default.
The benefits of a 30 year mortgage
- Lower monthly repayments: spreading your mortgage debt over a longer repayment term means your monthly costs will be lower. This can be a huge advantage in a time when soaring interest rates can make repayments unaffordable.
- Better affordability: when you apply for a mortgage the lender will assess if you can afford the repayments. As a 30 year mortgage has lower monthly repayments you are more likely to pass the affordability test. To get a rough idea of what you can afford, see our how much can I borrow calculator.
The disadvantages of a 30 year mortgage
- More expensive in the long term: As you will be paying interest for several years longer you will end up paying substantially more interest with a 30 year mortgage.
- Slower to build equity: As you are paying off less capital each month you won’t build up equity as quickly as with a shorter mortgage term. This will affect your ability to get the best interest rates when you remortgage.
- You’ll have debt later in life: How old will you be when you finish repaying a 30 year mortgage? Could it affect when you are able to retire?
Is it better to get a 25 or 30 year mortgage?
A 25-year mortgage will be better for most people than a 30 year mortgage. That’s because you’ll pay less interest overall, build up equity in your home faster, and be mortgage-free quicker. However, if you are struggling to get on the property ladder then the lower monthly repayments of a 30 year mortgage could be a huge advantage. You may also be able to make overpayments when you are able to depending on your mortgage product (paying the mortgage back faster and reducing the overall cost of the mortgage).
It isn’t just about the cost of your mortgage though. If high mortgage repayments will lead you to build other, more expensive, forms of debt such as credit cards, overdrafts or loans then a longer mortgage term could make more financial sense. That’s because the lower monthly cost could leave you with more money in the bank so you can avoid other debts.
It is also worth noting that you aren’t tied to your mortgage term forever. You may opt for a longer mortgage term when you are a first-time buyer as you need to do everything you can to lower your monthly repayments. However, a few years down the line when your income may have risen, you’ve built up some equity in your home and, perhaps, interest rates have fallen, and it is time to remortgage you could opt for a shorter mortgage term.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
What mortgage term is best?
There are advantages and disadvantages to any mortgage term. You need to weigh up what you can afford to pay each month against how much interest you’ll end up paying and when you want to be mortgage-free. In general, the shorter mortgage term the better as it will cost you less.
It can be a difficult decision to make so you may want to consider speaking to a mortgage broker. They can help you find the best mortgage deals on the market and advise you on which one might be best for your individual circumstances.
Am I eligible for a 30 year mortgage?
Your age will affect whether you are eligible for a 30-year mortgage. Lenders have a maximum age that they will lend to that ranges from 65 to 80 depending on the bank or building society. If you would be beyond the maximum age when the 30-year term ends you won’t be eligible for a 30 year mortgage.
It isn’t just your age that would affect your eligibility too. If you are applying for a joint mortgage you will both need to be young enough that your age today plus 30 years wouldn’t exceed the mortgage firm’s maximum lending age.
As well as your age, you will also need to meet all the other eligibility criteria of the lender too. This will include passing credit checks, proving you can afford the repayments, having a big enough deposit and have a suitable property. Read more in our guide “How to get a mortgage in 6 easy steps“
Are there interest free 30 year mortgages?
Yes. Someone with a 30 year term on an interest-only mortgage would repay the interest on their debt over 30 years and at the end of the term they would need to repay the initial capital they borrowed in order to become mortgage-free and own their home.
This is different to a standard repayment mortgage with a 30 year term whereby at the end of the 30 years you will have repaid everything that you borrowed plus the interest and you will own your home outright.
Is a mortgage term the same as your mortgage deal?
No. The mortgage term is the overall length of your mortgage. It is the number of years that you will make repayments until you are mortgage-free. If you took out a repayment mortgage with a 25-year term – the traditional mortgage term – then if you made all your monthly repayments, you would pay back the capital you borrowed and the interest over 25 years.
A mortgage term is different to a mortgage deal. A mortgage deal is the introductory interest period. For example, you might take out a five-year fixed-rate mortgage deal. That means you will pay a fixed rate of interest for the first five years. But the home loan will also have a mortgage term which is how long you will have to repay the debt that is far longer than the initial deal – you’ll be moved onto the lenders standard variable rate if you don’t remortgage when the deal ends.
When you remortgage, you would carry your mortgage term over to your new lender but get a new mortgage deal. For example, you take out a five-year fixed rate mortgage with a 25-year term. After five years you switch to a new fixed rate deal but take the remaining 20 years of your mortgage term with you.
Frequently Asked Questions
Can I get a 30 year mortgage at age 40?
Yes, you should be able to get a 30 year mortgage term when you are 40. The issue is most lenders don’t like a mortgage to continue past retirement. They are worried about how you will afford your repayments when you are living on a pension. However, the idea that we all retire at 65 is out-dated and many lenders now lend up to 70 and beyond.
In order to find the lenders who will offer a 30 year term that would take you past your 65th birthday consider speaking to a mortgage broker. They will know which banks and building societies to approach.
Can I get a 30 year mortgage at age 45?
Yes, but it will be more difficult. This is because you will need a lender who is prepared to offer you a loan you’ll be paying off until you are 75. This will reduce the number of mortgages you will be eligible for and could mean you miss out on the best interest rates available.
Most lenders have a maximum age of 65-70 as they don’t want their borrowers to still be making repayments once they are retired. They are concerned about affordability once you are living off your pension.
However, an increasing number of lenders are increasing their maximum age to 75 or beyond including Halifax, NatWest and Nationwide. The Yorkshire Building Society has a maximum age of 80.
But think hard before opting for a mortgage that you’ll still be repaying in your 70s. If you can afford a shorter-term life may be easier if you are mortgage-free before you retire.
Is a 30 year mortgage the longest term available?
Back in the day a 25-year mortgage term was the norm. Over recent years 30-year mortgages have become popular, but it is possible to get an even longer term. Some lenders will offer a 40-year mortgage.
Best mortgage term for first time buyers?
30 and 35 year terms are increasingly popular with first time buyers as it helps spread the cost and enables you to better afford your monthly repayments. Use our mortgage repayment calculator to see the difference a longer term can make to your repayments. But you will end up paying more overall to the lender in interest and be tied into the mortgage for longer.
