Should 40 year mortgages be banned?

[DistinguishedSocialCommentator]

Reading and hearing more and more of this.

IMO, extending mortgages and making almost a norm re 40 years for many, and it was 25 years when we got our first and second mortgages - 40 years IMO is just fueling the price rises in property

AIBU seeking a ban on 40 year mortgages??

IMO, 30 yrs is more than enough and there must always be a minimum 10/15% deposit and a 2 year record of saving money. This IMO, will gradually settle property prices.

FYI, we paid off on our own property and a couple of rentals about 14 years ago possibly a bit more

NB: Of course, no government will agree to that as it will hold back national growth and ledners will definitely fight it as it hits their profits. But 40 years mortgage is more than a life sentence into

Our 25 year mortgages we paid off with 15 and 14 years respectively

40 yr metages benefits the lenders bigger profits and feuls property prices

https://www.standard.co.uk/business/hsbc-40-year-mortgage-deal-interest-rates-bank-of-england-marathon-prices-lender-bank-big-six-b1103513.html

But your solution is for people to uproot themselves and their families to move to the opposite end of the country or to just save up massive deposits, which is nigh on impossible for many with wages stagnating and the CoL pushing prices up. You have to be under 30 to qualify for a 40-year-mortgage, so it's not like loads of 50somethings are getting them and expecting to live to 90 to pay them off. A longer mortgage term for younger people seems sensible.

Also, you mention paying off all your mortgages – did you have an inheritance that helped with that?

@DistinguishedSocialCommentator

and why not if you can get a job there, move your job there, self-employed etc
Perhaps because moving means - legal, moving and stamp duty costs; taking children from established social circles, changing schools; and a family support network developed from pregnancy?

My parents moved from north to south and we moved 20 miles from parents home in north London as property is a lot more expensive there
well, bully for your parents. My DH also moved from the midlands to the south, but he did so as a single 22 year old without university debts, children or other ties at a time when rents were low and beer was cheap.

people move, politicians recommend it - its historical - what is your problem with that??
See above and below

People move countries, FYI therefore moving a a few miles, 20 miles 100 miles etc is no big deal
actually it’s a bloody big deal, especially if you have young children or aging family for whom you may have to move back to the UK to supervise carers or face regular flight costs and upheaval in your personal and professional life multiple times a year. And of course, not all countries welcome you with open arms unless you have a nest egg and are of a profession that is needed. The US, Australia and Canada have very strict rules… unlike the UK.

Not everyone can afford a property or have the ability to manage it, hence council housing - the same housing where 2 million properties were given away at at 70% discounts in some cases
so you are aware that there has been a population explosion, an massive immigration influx and that waiting lists for council housing are years long (and if you get one your child may die of asthma due to mould and poor maintenance)? Waiting lists increased by 6.3% last year and currently stand at 1.29m households.

Even local authorities house people in different areas I'm sure of it -

The hundreds of thousands working from home - many have moved and many may - so whats the big deal in reminding people of that? Along with the self employed and the thousands working for NHS, post office, supermarkets, education etc etc

WFH is being phased out by most companies, the majority requiring you to follow a hybrid model; additionally what happens if you are made redundant? The job you’ve performed from Scotland or some remote rural area with few trains/motorways, because you’ve moved, happens to be in an industry based in the south? Or just a major city in another county? Well, the chances of getting another job are somewhat stymied aren’t they?

Ultimately, your lack of empathy or understanding of the complexity of modern family life is utterly astounding.

@DistinguishedSocialCommentator
So pleased you remember saying that now....however a shame you evidently still don't get it. And so now all those self-employed should move to the north...OK. And again, just because you could potentially get a job, not sure how you think everyone would be able to, and b) who would do those jobs in the areas the people gave moved from....

Ah I wondered who was being so vocal about something they clearly know fuck all about and then I saw the username 😂
This post is the property equivalent of no uterus no option - someone who bought 30 years ago has no idea what it's like buying now, to the point most would hopefully be embarrassed to voice their outdated views so loudly.
OP enjoy your property hoarding and pretending that doesn't make you the problem.

Agree 100%. My late husband and I bought almost 30 years ago but I have eyes and ears, and I see what my younger colleagues at work are going through. None so blind and all that.

No they shouldn’t be banned, you’re speaking from a position of huge bias and comparing to an entirely different market and economy. In many cases I suspect what will happen anyway is people will take out a mortgage of that length to meet requirements now but before the term expires likely have different (smaller) housing needs and so can downsize, removing the issue.

That being said I assume to help alleviate the problem in your area you’ll be selling some or all of your properties for below market rates so people can take out a shorter mortgage on them?

This...

Maybe sell your "couple" rental houses for what you bought them for, and at least 2 families won't need a 40 yr mortgage...

Read my OP - clearly states we have never expected or got a pensnny from either of our parents. My OH parents gave it all to their OH as he stayed with them - it was was close to 2 million - we were happy with that as they wanted that. My mum was killed in an accident back in asia at a young age, hit and run - dad remained and then started a new family with a much younger lady, the had kids ie my half siblings, dad offered cash in Will and some land on his estate back in my motherland - I thanked him as did my other siblings and assured him we were ok and he needs to worry, make previous if possible for his younger wife and 4 kids, which he did

As per my OP - we not only worked hard but its how you mange/spend your money that often makes money, EG, only borrow on property if you have to or business and everything else case - that's what we did - got local jobs so saved thousands on travel and time and we never bought anything on credit and taught our kids the same way - money makes money if you are careful

We see on far away hols for years, had older car, second hand and only manged with the one car until we became settled and got a newer car and smaller car and took invested wisely then encourage by day and my in-laws bought for cash a BTL, then another and then another, all cash

We had ordinary jobs with the local gov/nhs/private industry

We did not eat out other than big max, no far away hols, no new cars, worked up to 50 hours some weeks at least one of us did and our

Its as my mum and dad used to say and what we taught our kids and two of them earning are in the top 5% if not 3% - its not just eanring money that is hard, its what you do with it

All three of our kids have bought properties in London and two of them recently bought BTL's

Whats your point???

@DSC, you appear unable to understand that there are people right now who are doing all the exact same things that you did back in the day and still cannot buy a house except with a long mortgage because both house prices and the cost of living are so high.

Your utter lack of understanding that just because you did it 30 years ago, it is possible for everyone to do it now (in a completely different economic reality) is astounding.

You've had an actual expert clarify this to you and you've completely ignored them. Pardon me for listening to someone who actually understands what they are talking about over someone who thinks opinions are facts.

Sorry you lost your mum young.

What I'm taking away from the rest of your post is that you worked hard and cut your cloth accordingly – but many young people are doing exactly what you did now, going without holidays, keeping an old car going etc, not eating out, and it's STILL not enough to pull together a decent deposit to allow for a shorter mortgage term. As PP have said, you seem wildly ignorant about the financial reality facing young people trying to get on the property ladder now. How it was back in your day is not how it is now.

Just to add I have encouraged my kids NOT to get a BTL. Because it's an unethical distortion of the housing market. A house is for living in, if you want to earn money, you get a job.

More BTLs?! And you still don't think landlords hoovering up properties is part of the problem?

enough for me to make an informed judgement and these days unlike when we took our first mortgage, there was no internet, therefore most people lacked knowledge and skills re mortgages.

No internet didn't mean 'no chance to do any research'.
You really do have a selective memory.

So property hoarding runs in the family then. But that's definitely nothing to do with the current housing crisis of course, that's just down to 40 year mortgages and, when you were challenged on that, down to right to buy.

Thank you.
Sorry, I have ti disagree

Many parts of England, you can buy a first time buyer, decent property for 200k - in an ok area of the county/town etc

Would you agree that the millions working for the NHS. armed forces, police, fire officers, teachers, council workers, major supermarkets, car makers, building firms, train transport staff etc etc get about the same wages??

Assuming you agreed - a teachers/NHS/etc/etc pay goes a lot further in Blackpool, Bradford, Stoke-on-Trent, Coventry, Preseton, etc,et,c than it does in London

so what is stopping these people? Is it the state of the art, the latest mobile phones, ipdays, lpatops, designer goods, holidays, work-life balance etc from buying a property??

A sibling of mine years ago, her and her DH when they had their first child, they rented out a room and it made all of the difference

IMO, too many people priortise the wrong things and want everything and are quick to blame people like me/us that have worked hard, been prudent with our money, mad sacrifices ie no real hols, cabs, eating out etc and some people get envious

My mother would have been proud of us, sadly she got to see nothing

Not you - but envious people are just that - I've seen people make funny comments at work when we upgraded our car/s and they asked if we bought them or lease etc. Most of the people who worked with me were on higher salary but most were mortgaged to the hilt as they wanted there two abroad hols, two new small cars, eating out etc etc. Having said that, the blokes that worked in the surveying dept even the younger guys knew that buying property long run made them more financially comfortable

The real blame re housing prices lies with the government and Labour re the give-away of almost 2 million council properties. Now they are selling at discounts council and HA property.

Owners that never rented like us are just taxed and taxed no discounts

Yes, people need to learn to walk before trying to run, financially speaking and lenders don't help as its not in their interests
NB - this post is not really aimed at you but a couple of others

If I were 25, I'd rather have an affordable mortgage I'd be paying until I was 65 than be using my money to pay my landlords mortgage, watching house prices move ever further out of my reach until I risked still having to be paying a landlords mortgage for the rest of my days.

We thought this also when we bought our flat on a 40 year mortgage while on a low income and with a poor credit score. After making a few small overpayments we reduced the term to 30 years when the first 2 year fixed term ended, then 25 and we able to fix for longer terms. We wouldn't have been able to buy for several years or at all without it.

So your bright idea is that all the millions working for the NHS. armed forces, police, fire officers, teachers, council workers, major supermarkets, car makers, building firms, train transport staff move to the north of England? Who's going to do those jobs in the rest of the country!?

You're being deliberately obtuse. You know that's not the answer. You're also being goady by saying that people who can't get onto the housing ladder are busy spending their money on new cars, multiple holidays etc. No they're not – they struggling to make ends meet to pay rent to greedy private landlords.

Talking of which, why is it not okay for the Govt to sell off council properties, but it's okay for you and your family to reduce the nation's housing stock by snapping up houses/flats for BTLs to rent out?

I’d rather pay a 40 year mortgage than possibly 70 years of rent.

If the longer term lowers the monthly payments and therefore allows someone to buy this year instead of in say 5 years time when prices have also increased I don't see the issue. If the alternative is long term renting then again what's the issue? I remember being horrified when taking out my first 25 year mortgage seeing that we would pay back something like 2.5 x the amount borrowed but I'm still glad we did it. 25 year mortgages were the norm for many years when life expectancy was lower.

What is stopping a teacher/nurse/policeman from buying a house costing £200k?? How about the fact that they only generate salaries of £30-£35k on average, so they will only get a mortgage of 150,000? That the take home salary is £2300 and their mortgage is £1000, before transport/fuel/car loan/car insurance, food, utilities, childcare costs, clothes/shoes…?

surely you cannot be so naive?

30-year fixed rate mortgages are the norm in the US.

They seem to work perfectly well for most people, who will end up gaining equity faster than they pay down the mortgage. Most people will sell well before the 30-year term, too.

I think the key to your situation is 'rental properties'.

Lol, just spotted that too.

Half baked ideas it is then...

Am beginning to think the OP is Kirsty Allsopp…

In that case, why not make it easier and pay a 70year mortgage (as you said "75 years rent")- surely it would be cheaper and as a few said, finish paying it off early as you are more financially settled.

The lenders will be up for it as long as they saw the risk was within their criteria.

Alternatively, why not bring back large-scale endowment mortgages? You may get a payment that is a lot higher than your loan amount!!

For me, my family, friends and anyone that wants to listen - the sooner you pay of a loan the better. The longer the term of the mortgage, this not only benefits the lenders but also fuels property prices and that is a fact