One in three homeowners 'increase mortgage term'

Posted: 02 Oct 2006 08:57:40 GMT

A third of homeowners in Britain opt to increase the term of their mortgage when they change their plan, a new poll reveals.

A third of homeowners in Britain opt to increase the term of their mortgage when they change their plan, a new poll reveals.

The study by a comparison shopping site warns that those homeowners who change the term of their mortgage just twice could find themselves still paying for their property well into retirement.

The report predicts that Britons could be facing a £35 billion "never-ending mortgage trap" if they fail to stick with or even reduce the currents term of their mortgage.

Extending a mortgage by as little as five years can reduce mortgage payments, but also results in a "phenomenal amount of interest" being paid by consumers. The report suggests that someone extending the term of their mortgage just twice during their lifetime can pay as much as £28,835 in additional interest.

Head of mortgages at moneysupermarket.com, Louise Cuming, commented: "It is clear that extending the mortgage term is a short-sighted solution which has a long-lasting impact. Not only do consumers end up paying significantly more, but they could still be paying their mortgage off at the same time as collecting their pension."

The average first-time buyer is now aged 29-years-old and 70 per cent of buyers opt for a 25 year term on their mortgage.

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