According to Twenty7tec, the adviser technology firm, there has been a notable shift in mortgage search preferences in 2023, with a majority of homebuyers looking for longer-term mortgages.
The data reveals that 70.73% of mortgage searches were for terms extending over 25 years, a substantial increase from the previous year.
This trend towards longer mortgage terms has been growing since the launch of the 40-year-fixed rate mortgage by Habito in 2021.
The demand for such long-term mortgages has significantly diverted interest away from shorter terms. In fact, in the year 2022 to 2023, only 29.27% of mortgage searches were for terms under 25 years.
Nathan Reilly, director of Twenty7tec, comments on the shift: “What’s perhaps most interesting about these figures is that the biggest rise is for remortgage searches as this group will have already had a term for at least two years, and they are seeking long-term mortgages as an option to bring payments down.
“Will this be a continued change in 2024? Time will tell, but the data certainly points in that direction.
“House buyers are actively seeking ways to bring their monthly payments down as other payments soar, and extended terms may be one way to do that.
“However, longer-term mortgages can also increase the total debt size and take far longer for house buyers to pay it off, leaving some unable to be mortgage-free until they’re retired.”
