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written by naomi baron

Buyers Have Increased Freedom to Extend Mortgage Terms

The Government has closed a loophole in the Help to Buy scheme which will significantly help prospective home owners.

For the first time, owners of the Help to Buy properties are able to take out a 35-year mortgage.  With the freedom to reduce monthly mortgage payments and spread the borrowing out over a longer period, this should eradicate the difficulties faced by those who are not quite able to meet a higher monthly commitment.

Housing Minister Esther McVey said that

I want our Help to Buy scheme to work for home owners so we are giving people the freedom and flexibility to take out longer mortgages, if it suits their needs.  our Help to Buy schemes have already been used more than 500,000 times by families to get a leg up onto the property ladder

These changes, which are effective immediately, should attract new entrants to the market and providing greater choice for customers who are looking to re-mortgage under the Help to Buy Scheme. 

The move itself is reflective of the changes happening in the wider mortgage market where we have seen the number of first-time buyers taking out a mortgage of more than 30 years double in the last decade.  There is the chance that this could also pave the way for more competitive deals in an ever more wide-ranging market, as mortgage lenders have more confidence in lending for longer terms.