25-year fixed rate mortgage Deposit requirement, repayments etc)

Can you get a 25-year fixed rate mortgage?

No, in the Uk you can not get a 25-year fixed rate mortgage as no mortgage lenders offer a mortgage with a 25-year fixed rate term.

The best you can get in the UK are mortgages with a fixed term of 10 years.

The only way you will be able to get a 25 year fixed rate mortgage will be to switch your 10 years fixed rate or any fixed rate mortgage you have to another fixed rate mortgage until it reaches 25 years.

The problem with this is that it is highly unlikely that interest rates will stay the same for 25 years and the rates you switch to will probably fluctuate over time.

What will the payments on a 25-year fixed rate mortgage look like?

An example of what you could pay on a 350000 mortgage could be: £350000 over 25 Years at a rate of 5.5 % will incur a monthly repayment of £2149.31 and a total repayable of £644793.00.

If you are considering getting a mortgage for a 25-year fixed rate term then using a mortgage broker may be a good choice as mortgage brokers usually have access to many more products than any specific mortgage lender.

Whilst it is unlikely your mortgage broker will find you a 25-year fixed rate mortgage they may be able to find you something which achieves your financial needs.

Mortgage brokers will also usually have access to specific deals from mortgage lenders as well as experience on which mortgage lenders will be more likely to accept your case. This will help you avoid getting rejected on a mortgage application and having to build credit due to the damage a rejection might do to your credit score.

If you have bad credit or are self-employed then specialist mortgage brokers such as bad credit mortgage brokers or self-employed mortgage brokers may be useful.

Government schemes you may qualify for with a 25 year mortgage term

Below are some of the government schemes you may be eligible for.

• Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy- allows you to buy your home at a discount price.
• Preserved right to buy– same as above.
• Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich the local councils provide the Norwich home options scheme.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.