Mortgage Term
The total length of time over which you agree to repay your mortgage, typically ranging from 15 to 40 years in the UK.
What is the Mortgage Term?
The mortgage term is the total number of years over which you agree to repay your mortgage in full. This is different from your deal period (such as a two-year or five-year fix), which is the length of your initial interest rate product. The term is the overall lifespan of the mortgage itself.
Common term lengths
The traditional UK mortgage term is 25 years, but longer terms of 30, 35, and even 40 years have become increasingly common, particularly among first-time buyers facing high property prices. Shorter terms of 15 or 20 years are also available for those who can afford higher monthly payments.
Why the term length matters
The length of your term has a dramatic effect on both your monthly payments and the total amount of interest you pay. A longer term means lower monthly payments but significantly more interest over the life of the mortgage.
For example, on a £250,000 repayment mortgage at 4.5%:
- 25-year term: monthly payment of approximately £1,390, total interest around £167,000
- 30-year term: monthly payment of approximately £1,267, total interest around £206,000
- 35-year term: monthly payment of approximately £1,181, total interest around £246,000
Extending from 25 to 35 years saves roughly £209 per month but costs an additional £79,000 in total interest.
Changing your term
You can usually change your mortgage term when you remortgage or do a product transfer. Shortening your term is an effective way to pay less interest overall if your finances allow the higher payments. Equally, extending it can provide breathing room if your circumstances change.
Important caveats
Most lenders require the mortgage to be repaid before you reach a certain age, typically 70 to 80. This can limit how long a term you can take, especially if you are buying later in life. Some lenders are more flexible than others on maximum age at maturity, so it is worth shopping around if this is relevant to your situation. Also be aware that a longer term means you build equity more slowly, which affects your LTV and the rates available at remortgage.