Colchester First-Time Buyers Could Face 50 Year Mortgages!

Colchester First-Time Buyers Could Face 50 Year Mortgages!

First-time buyers are important for both landlords and homeowners. If first-time buyers aren’t buying, they still need a roof over their heads, so they rent – which is good news for landlords. If they buy, demand for Colchester starter homes goes up – which makes it easier for other Colchester homeowners to move up the property ladder.

First-time buyers are the life blood of the property market but they are also the most susceptible to:

  • Interest rate rises
  • Mortgage affordability

Mortgage Affordability for Colchester First-Time Buyers

Over the last decade property prices in Colchester have continued to rise faster than wages. Currently the average value of a Colchester property stands at £312,778. This leaves first-time buyers in Colchester chasing ever-larger loans. Housing affordability is at an all time high so the only practical solution to keep mortgage repayments affordable for first-time buyers is to extend the period of the loan.

In recent years, it has become commonplace for first-time buyers mortgages to be 30 and 35 years in length – often with the “Bank of Mum and Dad” helping with the deposit. Some high street banks now offer mortgage terms of 40 years which would mean Colchester first-time buyers could still be paying off their mortgage into their mid 60’s. It seems the age of the everlasting mortgage is upon us.

The prospect of 50-year mortgages doesn’t seem as far-fetched as it would have to previous generations. Life expectancy for a male in the 1970s was 69 years compared to 79 today so it is possible.

Some commenters have expressed concerns such long term mortgages puts first-time buyers at more risk to the highs and lows of the property market. First-time buyers can take comfort from the house price bubble bursts over the last fifty years which, as a country, we have always recovered from within a few years.

Colchester property values


How Would Interest Rate Rises Affect Colchester First Time Buyers?

In a word “Badly”. The current 0.25% UK interest rate is the lowest for 300 years so mortgages are unlikely to ever be this cheap again. The most likely direction of the next change is up so anyone taking out a new mortgage should seriously consider fixing the interest rate as a cushion against potential future interest rate rises.

UK interest rates

Could Mortgage Terms Be Extended Still Further?

Yes they could. Colchester first-time buyers faced with the prospect of 40 or even 50 year mortgage terms should spare a thought for Swedish first-time buyers. Swedish property prices are so high 140 year mortgages were being arranged! Last year Swedish regulators stepped in and reduced the maximum term of a Swedish mortgage to 105 years! Longer than most lifetimes but an indication that UK mortgages could well be extended beyond 50 years in the not too distant future.

If you’re first-time buyers looking at properties in and around Colchester and you’d like an informal chat about any aspect of the Colchester property market why not give me a ring on 01206 862288 or email Would you sign a 50 year or longer mortgage? Add your comments below and I’ll get back to you.


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