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HSBC UK unveils new 40-year mortgage term

Journalist: Daniel O'Boyle, Evening Standard

ended 30. August 2023

"HSBC UK is helping to make homeownership more of a possibility for people looking to buy their first property, as it launches its longest ever mortgage term, the bank revealed today. For the first time, those taking out a mortgage with HSBC UK, have the option of arranging their borrowing over a 40-year term, which would provide lower monthly repayments.

 

The new 40-year terms will be an option on residential capital repayment and Buy To Let mortgages and is available to those who take out their mortgage with a broker as well as those who arrange their own mortgage with the bank directly. Eligibility can be found here."

 

12 responses from the Newspage community

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Editor
David Stirling
Independent Financial Advisor at Mint Wealth
With mortgage rates still high many of our clients are looking at extending their mortgage term to try to help manage their monthly mortgages. As one of our go-to lenders, HSBC are helping us move from the confines of 35 years to 40 years and it is a welcome criteria change.

It won't suit everyone and the maximum age is still 80 - however, this could help young first-time buyers in particular, to get out of the rental trap. We would always look at mortgage overpayment calculators with our clients to help get them out of debt sooner, which would be a further option to add to the mix.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Long-term mortgage holders should examine their repayment capabilities on a regular basis. Allowing a 40-year term mortgage to run its course could add hundreds of thousands of pounds to the total amount repaid when compared to a 25 or 30-year mortgage term.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
HSBC finally jumping on a very full bandwagon. Most lenders have been offering 40-year terms for a long time. With extending their term as one of the most used tools by borrowers to reduce the impact of the rate jumping up when their current deal ends, HSBC was losing out on a growing segment of particularly younger buyers looking to keep their payments as low as possible.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
HSBC continue to be one of my 'go-to' lenders. Now they have added this string to their bow, there isn't much they don't do.
They have great affordability calculations for self-employed clients, they lend to age 80, and their rates are always very near the lowest in the market unless they price themselves out to protect service levels.
And my BDM is the cherry on the top, always available to take a call and will get involved when needed if underwriters aren't fully understanding a case.
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Elliott Culley
Director at Switch Mortgage Finance
This will certainly increase HSBC's share of mortgage borrowers. With mortgage payments quite high at the moment, this gives some clients the opportunity to make those payments that slight be easier. I have had a few first time buyer clients recently who want to explore the options of a 35 year term intially but then ask for a longer term comparison as well. So there is certainly demand for this type of product currently.
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Elliott Benson
Owner at Sett Mortgages
Great news, I work with a lot of first time buyers and HSBC are one of the consistently cheaper high street lenders so offering a 40 year term is going to allow more buyers to ease the monthly payment pressure at the moment and then in future when moving or re-mortgaging, look to reduce the term if fixed rates continue to fall.
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Lee Gathercole
Co-Founder at Rebus Financial Services
It's great to see the likes of HSBC increasing their mortgage term to 40 years, this will be really beneficial to first-time buyers in enabling them to get on to the ladder and current mortgage holders as they try to manage increasing interest rates and substantially higher mortgage payments since they last took out their mortgage.

A longer mortgage term does however come with its risks and it's likely to take most buyers or homeowners close to retirement. More importantly, they need to understand that they will pay more interest on their mortgage over the longer term too.
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Graham Cox
Director at Bridging Hub
More papering over the cracks in our dysfunctional housing arket. Until we address the elephant in the room, that house prices are unaffordable in relation to people's incomes, this madness will continue. Extending and pretending with longer mortgage terms are not the answer.
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Amit Patel
Adviser at Trinity Finance
HSBC offering a 40-year mortgage term is long overdue as their competitors have been offering longer-term fixes for a while now. The dynamics of the mortgage landscape have shifted over the years with more and more borrowers opting for longer-term fixes to keep their monthly repayments as low as possible due to the rise in the cost of living.
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David White
Chief Operations Officer at Simply Lending
HSBC allowing a 40 year mortgage term is welcome news and brings them in line with what is becoming an industry standard.

Whilst extending a term will increase the overall debt to be repaid on a mortgage this news will be met with a level of relief by consumers who are crying out for any and all ways to reduce their monthly outgoings.

This will not only help existing clients of HSBC looking for ways to control their payments but also aspiring clients who are struggling with acceptance due to affordability restrictions.
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Ashley Thomas
Director at Magni Finance
This is a good idea and gives people opportunity to reduce their monthly cost. Where the rates have increased significantly over the last year, this is a great way to reduce the costs. We have seen more clients than ever look at ways to reduce their mortgage payments, extending the term being the most popular.

The downside is that the longer the term, the more interest you have to pay. Although, if you make regular overpayments you can mitigate the increased costs of interest.
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Ben Tadd
Director at Lucra Mortgages
This is a good move from HSBC, recognising higher mortgage repayments for consumers based on the current higher rate environment and flexing their criteria to make it easier for people to be able to afford the repayments. This will help HSBC win more business versus other high street lenders that have already adopted a maximum 40-year term. Borrowers need to be made aware of the implications however of taking a longer term, as there will be more interest to pay by taking the term over a longer period, and it could mean that borrowers will be forced to retire later in life if their mortgage term goes beyond their current anticipated retirement age.