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Extending mortgage terms

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 14. December 2022

Looking to speak to mortgage brokers who have had clients extend their mortgage terms to lower their payments. 

  1. Has this become more common? 
  2. How long are typical extensions?
  3. How much does it lower payments? 
  4. What recommendations would you give customers looking to lower their payments?

11 responses from the Newspage community

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Mike Staton
Director at Staton Mortgages
We are starting to see more clients coming in and looking at simple ways to make their mortgage more affordable. The easiest option and by far the most popular is to extend their mortgage term. With many lenders now allowing you to go to at least 75 years old there are a lot of options out there. One client today extended their mortgage by 5 years and reduced their monthly payments by nearly £300. However you need to be aware that like all good things in life, this reduction comes with a huge risk. Having a mortgage in your 70s can be massively detrimental to your retirement plans so should only be considered as a last resort or a short term plan
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Justin Moy
Managing Director at EHF Mortgages
We have certainly seen plenty of first-time buyers and home movers extend to 35yr terms, just to make it affordable - one or two have been as long as 40yrs. This is particular to those buying in the South East and around London, where prices are higher than average, and incomes are stretched as a result. What is surprising is that for most, this still works out cheaper than renting a similar property in the same area, and at least you have property ownership compared to the alternative option.

Whenever we discuss budget and mortgage terms, we work to the principle that the term can be reduced in the future, as affordability allows in the future and that any term is not set in stone. When remortgaging or moving up the property ladder, that is often the time to shorten that term.


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Rita Kohli
Managing Director at The Mortgage Stop
We are seeing more clients opting to extend their terms. We typically see extensions of 10-15 years but this varies depending on the client's situation. By extending the term of the mortgage we reduce the impact of the higher rates but it doesn't mean that monthly payments won't increase. Recently, one of our clients' was due to see an increase in their monthly payment by almost £600. To keep this affordable, we extended their term by 10 years, reducing the impact of the increase by £400. However, this meant the overall cost of their mortgage is now significantly higher so clients must understand this before making a decision. Some clients who want to extend will see their term go past retirement age which they haven't considered before and may impact their retirement plans. It's important to consider all factors when looking at extending
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
I've had many clients wanting to extend their mortgage terms or even temporarily go onto interest only. The cost of energy, fuel and food has had a massive impact on those who are on, not just low incomes but, modest incomes too. Extending a mortgage from 25 to 35 years would save you about £150 per month depending on interest rate. However, if your lender will let you go onto interest only your payments could drop by several hundred. Lenders aren't willing to do this, apart from the most severe of cases, as there are several risks associated with interest only. Lenders will fear that borrowers become used to the lower payments, habits change, and there is no realistic prospect of them returning to repayment and clearing their debt.
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Kylie-Ann Gatecliffe
Director at KAG Financial
Extending the mortgage term is one of the simplest ways to reduce clients monthly payments. In all honesty though we have only had a handful of clients opt to do this. Most clients have been able to absorb the increase in monthly payments they have seen. With most lenders now offering mortgage terms up to age 75, being able to extend the term is a short term help to reduce the burden of monthly payments, however we do always highlight to clients the difference in interest this will make to their overall mortgage. Effectively by increasing the term their total interest paid back will always increase. This does deter some clients from doing this, whereas others need the safety net of a lower monthly payment. As rates continue to reduce the increase in monthly payments is reducing which will hopefully prevent term extensions further.
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Chris Sykes
Technical Director and Senior Mortgage Adviser at Private Finance
Hey Anna, hope you are well.
It has become more common yes, obviously point 2 and 3 vary case by case, we have a repayment calculator on our website if you wanted to play with those elements.
I think the key thing here is point 4, our recommendations around it. I don't think all clients appreciate (until I bring up with them) the scale of that decision. Extending the term can very significantly increase the interest costs that a mortgage holder pays over the term of their mortgage and although many intend to reduce it back down or overpay, that intention doesn't always materialise into action. It would be interesting to see if there is any data anywhere on the percentage of people that overpay.
I think the key is that it is a big decision to make and if higher payments can be paid, it is usually best they are and term left as is
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Amit Patel
Adviser at Trinity Finance
I have seen a spike in the number of borrowers who have had no option but to extend their mortgage term just to make the monthly repayment affordable.

This is more costly as the interest accrues for the additional years the term has been extended to. Some have extended them by 5 to 8 years. I advise my clients to make overpayments where possible to reduce the overall cost of the interest as most lenders allow overpayments up to 10% without incurring an early repayment charge.

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Gary Boakes
Director at Verve Financial
We have seen a large number of clients looking to extend their term when they remortgage to lower their monthly costs. With the majority of mortgage payments increasing 40-50% it is understandable given the cost of goods, food and heating why customers are looking to save every penny they can. I'm a firm believer that we have a long term goal for our mortgage but in the short term we suit our mortgage to suit our set of circumstances as that will constantly change, so I'm happy to recommend people adding 5-10 years to their term if that makes them sleep at night.
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Austyn Johnson
Founder at Mortgages For Actors
A lot of FTB and newer homeowners are needing to look at much longer stretches to aid affordability, but luckily most mortgage products come with an overpayment facility, so they can boost their payments as needed.
Typically, we are needing to look at 35 year terms or until the client is 70. With my personal clients, I can often stretch that on higher though.
It can lower payments dramatically, but obviously, you then pay interest for a lot longer.
My advice is, check affordability and work out the shortest term you can handle as this will then mean less interest payments over the term.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
There are several reasons why clients might choose to extend their mortgage terms. One reason is to reduce their monthly mortgage payments by spreading the cost of their loan over a longer period of time. This can make it easier for them to manage their monthly expenses and budget for other important expenses, such as groceries, utility bills, and healthcare. Finally, some clients might choose to extend their mortgage terms to free up cash for other purposes. For example, they may want to use the money they would have spent on monthly mortgage payments to make home improvements, invest in other assets, or save for retirement.
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Elliot Cotterell
Director at Windsor Hill Mortgages and Cotterell & Cotterell Commercial Finance
We've seen a lot of clients looking for the options available to reduce their monthly outlay to cope with the increased costs brought on by the rise in rates combined with the cost of living crisis. These have included lenders raising their maximum age at end of the term allowing for longer mortgages and also interest only mortgages. Both these options will decrease the monthly payment but you need to be aware that it can cost you more over the long term,