Introducing the 57 year mortgage!

Abbey, Britain’s second largest mortgage lender is offering the chance to repay your mortgage over 57 years !

Recently there has been a move for homeowners wishing to spread the cost of their repayments over a longer period of time. According to Moneyfacts, 8 out of 10 lenders over a repayment period of over 25 years, but warn that whilst repayments may be lower, the interest repaid becomes considerably higher.

Take an example of a £100,000 loan over 25 years at 5.25%. The monthly repayment on this would be £599.25, making the total sum repaid £179,775. Yet if this loan were taken out over 57 years, the monthly repayment would be reduced to £461. The total sum repaid would then become £315,159 which is £135,384 in added interest!

As yet no-one has taken up the offer of a 57year mortgage, but Abbey are proud to be able to offer it.

A Moneyfacts analyst says that spreading the cost of repayments over a longer period of time does reduce the monthly payment figure, however this must be measured against the amount of interest paid over the lengthy term. Furthermore they considerate a daunting prospect to be paying a mortgage from the age of 18 till beyond retiral age! They advise to put extra into your mortgage when you can and regularly review your mortgage, ensuring you always get the best deal to suit your own circumstances and that way your mortgage free days may draw a little bit closer.