Mortgage blog: A 35-year mortgage or a free cat? The choices faced by today’s borrowers

Posted 3 September 2014

New research has found that more and more mortgage borrowers are being forced to take their home loan over 30 or more years in order to ensure that their repayments are affordable. According to data from the Council of Mortgage Lenders (CML), one in five of the 171,000 loans taken out in the second quarter of this year had a term of 30 years or longer with a higher proportion of first-time buyers taking out lengthy loans.

We look at why more borrowers are taking long term mortgages and we also look at an unusual four-legged perk being offered to mortgage customers in Russia.

Three in ten first-time buyers choose mortgage term of 30 years or more

According to the latest Council of Mortgage Lenders figures over 30,000 mortgages taken out between April and June 2014 had a term of 30 years or more. The CML also reported that the figure was higher among first-time buyers, with 28% of new homeowners taking out a loan over three decades or more.

The news comes after the Bank of England’s most recent Financial Stability Report revealed that nearly a quarter of new mortgages last year were for 30 years or more, compared with just 15% in 2007.

Keith Osborne, editor of, says: “While taking out your mortgage over a longer term may help you to reduce your repayments it does mean that you pay back significantly more interest in total.

“On a £200,000 mortgage charging 5% interest you can expect to pay around £100,000 more if you choose to take the mortgage over 35 years rather than over 20 years.”

Changes to mortgage underwriting have also been responsible for borrowers taking 30-year mortgages. There has been evidence that borrowers are taking out longer term loans in order to satisfy stricter affordability checks being imposed by lenders.

While borrowers in the UK are facing tough choices about their new mortgage, customers in Russia are being given a slightly different mortgage option.

Russian bank offers free cat to borrowers

One of Russia’s largest banks is offering a unique perk to potential borrowers – the loan of a cat.

Sberbank has announced that every new mortgage customer can choose from one of 10 breeds of cat as a sign of good luck for when they move into their new home. Each borrower chooses their cat which will be delivered to their housewarming party – but only for a two-hour period.

Many Russians say that a cat is a sign of good luck to people moving into a new home and the moggy will be delivered in time to cross the threshold first and to pose for photos and videos. The campaign will also reportedly feature delivery cans with cat logos across the streets of Moscow.

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