When the baby-boomer generation bought their first homes they were typically in their twenties, took out a 25-year loan, and fully expected to be mortgage-free long before they hit the big Six-Oh.
Bring on the cruises and the two-seater sports cars. With an empty nest, no debts to speak of and a final salary pension, life for some really could look like those ads where elegantly greying couples wandered hand-in-hand on the beach.
Ha! That was then. Today’s first-time buyers are far more likely still to be paying off a mortgage well into their sixties and possibly beyond. Borrowers are signing up in ever greater numbers to ultra-long term loans of 30 years or even more as a way of being able to afford to buy a first home.
More than one in four buyers last year (26 per cent) took out a 35-year loan, up from 16 per cent in 2007, according to the latest Generation Rent report from the Halifax.
Soon, the idea of a traditional 25-year mortgage may seem as quaint as using a pager, or a fax machine. The average age of a first-time buyer is also rising relentlessly, because it is so hard to raise a deposit.
So the combination of later entry to home-ownership and the rise of the marathon mortgage means far more people will still be making repayments practically into their dotage.
In theory, long-life loans make sense because of improvements in life expectancy. If we are all going to live to our late eighties and beyond, and if we are working longer too, then why shouldn’t we stretch out our mortgage? It’s a tempting thought, particularly because, the longer the term, the lower the monthly repayments.
Marathon mortgages do, however, come with a couple of big snags. Caveat number one is that increasing the term of a means the overall cost will be greater. Much greater.
Take the example of a £200,000 repayment loan over 25 years at a rate of 3 per cent. Using the MoneySavingExpert.com mortgage calculator, instalments would be £948 a month with a total cost over the full term of £284,478.
Increase the term to 35 years and the monthly repayments drop to £770, but – and here’s the painful part, the total paid rises to £323,201. That is assuming interest rates stay the same. This, of course, is highly unlikely to happen over a period of three and a half decades.
It hardly needs spelling out that from the current rock bottom level, base rates have only one way to go in the medium to long term: up.
Not only does an ultra-long term mortgage cost more, it also puts the borrower at risk for longer. It means more years of being exposed to interest rate rises, and longer at the mercy of a job market that does not always look kindly on older employees. No wonder 44 per cent of those questioned in the Halifax poll say they are worried they won’t be able to afford their mortgage payments in retirement.
The generational divide is just one of the fractures in the housing market: the other obvious one is geographical, with prices in some areas, notably London, being out of reach of all but the very wealthiest first timers.
A poll for The Observer found more than two thirds of people believe the country is in the grip of a housing crisis. People lay the blame on a variety of possible culprits including immigration, wealthy foreign investors and buy-to-let landlords.
Whatever the reasons for high house prices, taking out a longer-term loan might be the only way of getting on the ladder, but a marathon mortgage does take its toll – rather like an actual marathon, in fact.
Ruth Sunderland is City Features Editor of the Daily Mail