Struggling homebuyers could cut £255 off their monthly mortgage payments by making one major change.
But experts warn this move, while easing short-term pressure, could cost thousands more in the long run if not carefully managed.
Switching from a standard 25-year mortgage to a 40-year term could significantly cut monthly payments for millions of homebuyers, new figures from Moneyfactscompare.co.uk have shown.
This offers a potential "lifeline" to first-time buyers stretched by soaring house prices and high interest rates.
The research found that on a typical £250,000 mortgage at an average rate of 5.05 per cent, a 40-year deal reduces payments by around £255 per month compared to a 25-year term.
However, the total interest paid over the life of the loan could be tens of thousands of pounds higher.
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, explained: "One way new buyers could afford monthly mortgage repayments would be to choose a longer-term.
"However, those monthly savings come at a cost and borrowers with lengthier mortgages will make monthly repayments for longer and incur paying considerably more mortgage interest overall, so making overpayments to reduce the term and interest incurred is wise."
Homebuyers offered 'lifeline' that could save them £255 a month on their payments
| GETTYBorrowers with longer-term mortgages are encouraged to overpay when they can.
For example, someone who overpays £200 per month on a 40-year £250,000 mortgage could reduce the term by almost 13 years and save more than £123,000 in interest.
Most lenders allow borrowers to make annual overpayments of up to 10 per cent of the remaining mortgage balance without penalty, though some may permit more.
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Over two-thirds of first-time buyers now take out loans lasting 30 years or more
| GETTYAccording to Springall, extended mortgage terms are becoming the norm.
Over two-thirds of first-time buyers now take out loans lasting 30 years or more, a shift driven by affordability pressures and changing career patterns.
She said: "As consumers work for longer it’s easy to see why the majority (85 per cent) of mortgages allow them to push their term to 40 years.
"Those prioritising their homeownership plans over their pension may well choose a longer-term mortgage to more comfortably afford mortgage payments."
However, she warned that stretching repayment periods into later life can leave borrowers financially vulnerable in retirement.
Being "asset rich and cash poor," she said, could eventually lead some to rely on equity release to supplement their income.
The Financial Conduct Authority reports that the average deposit paid by first-time buyers in 2024 was equivalent to around 60 per cent of household income
| GETTYThe Financial Conduct Authority reports that the average deposit paid by first-time buyers in 2024 was equivalent to around 60 per cent of household income, while rent costs have surged by £221 a month in the past three years, according to Zoopla.
Springall added that while the Government’s goal of building 300,000 homes per year offers hope, the shortfall in affordable housing remains a "crippling issue" for buyers.
As a result, longer mortgage terms may continue to grow in popularity, but experts stress the importance of planning ahead and making overpayments where possible to avoid paying more than necessary over time.