The number of 40-year mortgages approved jumped over 20-fold in 2018, up from only 162 in 2017, according to ludlowthompson.
The London estate agent said both the supply and demand for 40-year mortgages has surged due to increased life expectancy and individuals working for longer.
Traditionally, the standard mortgage has been 25 years, with the repayments ending by the time the borrower reached 70 or 75.
40-year mortgages allow borrowers to extend the period of their loan, effectively reducing their monthly repayments. This is particularly useful for first-time buyers to get on the property ladder, which in recent years has been tougher due to stricter affordability checks put in place by banks.
ludlowthompson also found that the number of mortgages approved with a term of 25 years or more also jumped 10% last year to 499,558, up from 455,647 in 2017.
Its findings suggest the high levels of competition for mortgage business, helped by challenger banks, has also contributed to the growth in longer term mortgages.
“The huge increase in longer-term mortgages is a much-needed additional of innovation to the mortgage market,” Stephen Ludlow, chairman at ludlowthompson.
“It allows younger buyers to reduce their monthly mortgage payments and give flexibility to older people who want to move but were previously locked out of much of the mortgage market.”
“Many individuals who are getting on the ladder at 30 now expect to be working still well into their 70s so stretching their mortgage out makes perfect sense,” he concluded.