Over 70% of broker searches were for mortgages of 25 years and over in 2023, as homeowners bid to lower monthly home loan costs, says Twenty7tec.
The search engine says 70.7% of the total mortgage market searched for a mortgage 25 years and over on its platform this year, adding that the traditional 25-year term and under market has been overtaken by those looking for 25 years or more.
It points out that the move comes after the launch of Habito’s 40-year-fixed-rate mortgage in 2021, which saw “the demand for long-term mortgages skyrocket and drag the majority of searches away from shorter terms”.
The platform says remortgage searches saw the biggest rise across the board, with searches for 40 years or more jumping by 54.82% from a year ago.
First-time buyers saw the most significant rise in 40 years or more searches this year, up 43.75%.
While purchase mortgage demand — for all but FTBS — for 40 years or more rose by 16.45%, from 12 months ago.
All other search term demand dipped, says the firm.
Twenty7tec director Nathan Reilly says: “What’s perhaps most interesting about these figures is that the biggest rise is for remortgage searches as this group will have already had a term for at least two years, and they are seeking long-term mortgages as an option to bring payments down.
“Will this be a continued change in 2024? Time will tell, but the data certainly points in that direction.
Reilly adds: “House buyers are actively seeking ways to bring their monthly payments down as other payments soar, and extended terms may be one way to do that.
“However, longer-term mortgages can also increase the total debt size and take far longer for house buyers to pay it off, leaving some unable to be mortgage-free until they’re retired.”
