First-time buyers sign up for 35-year mortgages

Costs are however substancial

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Mortgages of more than the normal 25 years are being offered to home-buyers and 30% of all loans in early 2018 were for periods of from 25-30 years – with one bank offering a loan of 35 years.

With interest rates averaging 1.49% for 20-year loans, the offer of a 35-year mortgage from a Crédit Mutuel offshoot is interesting first-time buyers looking to buy a property they could not normally afford.

However, the costs are substantial and finance information site Cbanque did the calculations for a buyer who could repay €750 month.

They could get a 25-year loan at 1.7% and afford to borrow €171,000. Over the term, this would cost €53,900 in interest and insurance.

Taking a 30-year 2.03% loan lets them borrow an extra €16,000 at an overall cost of €82,600... while a 35-year loan at 2.55% gives €5,200 more budget but costs €122,300.