More borrowers are taking marathon mortgages that will last into retirement – how risky are they?

Increasing numbers of borrowers face still paying off their mortgage in retirement, new research suggests.

Getting on the property ladder remains a challenge with high house prices even despite mortgage rates falling in recent months.

The Financial Conduct Authority (FCA) and the Bank of England have tried to boost the market recently by urging lenders to be more flexible and relaxing loan to income requirements.

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But another way around affordability challenges is to borrow for a longer term.

A Freedom of Information (FOI) request from the FCA, analysed by Quilter, has revealed a significant rise in the number of people taking out mortgages with a term of 35 years or more.

These are often called marathon mortgages.

Its analysis found that in 2024, 30,338 mortgages with a term of 35 years or more were sold to people aged over 36.

Over a five-year period since 2019 there has been a 251% increase in the number of borrowers taking out longer loan terms. There has also been a 56% increase in the number of borrowers aged 31-35 taking out these lengthy loans.

This means many borrowers could still have a mortgage when they are in their 70s.

That may put extra pressure on your golden years, especially with the average retirement costs rising to £43,900 per year.

But Quilter suggests longer loans may not be such a bad idea.

The rise of marathon mortgages

The typical mortgage term for borrowers is 25 years but spreading out the cost over 35 can make more financial sense, especially with high mortgage rates and other bills rising, as it lowers the monthly repayments.

A 25-year £200,000 mortgage on a five-year fix at 5.01% would cost £1,170 per month. But moving the term to 35 years would reduce the monthly repayments by £160 to £1,010.

That may not seem like much, but over five years a borrower would have been able to keep £9,600.

The figures suggest that increasing numbers of older borrowers have been doing this since 2019.

In 2024, 90,616 borrowers aged 31 to 35 took out a mortgage with a term of 35 years or more, up 8.5% annually, the research shows. There were 30,338 borrowers aged above 36 – up 42.5% annually.

Are marathon mortgages loans risky?

There have been warnings from analysts such as former pensions minister Steve Webb that these longer term mortgages represent a risk to retirement.

There is a rather big financial risk as 35-year mortgages will be more expensive over the long-term.

The same £200,000 mortgage would cost £351,103 over 25 years and £424,473 with a 35-year term.

That’s a £73,370 difference.

But Zara Bray, mortgage expert at Quilter, says this doesn’t necessarily need to be viewed negatively especially as there will be opportunities to remortgage to lower rates and shorter terms, plus borrowers can overpay some of their mortgage if they have spare cash.

Retirees could even downsize to help pay off the mortgage.

Bray said: “Given the majority of mortgages are supported by a mortgage adviser, this is a positive example of advice enabling customers to remain in their homes during difficult macroeconomic conditions.

“Extending your mortgage past retirement age may be a sensible lever to pull in the short term, allowing other assets to remain invested. However, the key to avoiding challenges with a long-term mortgage later in life is to regularly speak to your adviser, as they will be actively scanning the market for improved rates or new innovative products that address the affordability strain – providing more options at the end of your fixed term.”