TSB noted an increase in the average mortgage term for first-time buyers, rising from 30 years in 2021 to 32 years in 2023
More than half (57%) of first-time buyers clubbed together with someone else to buy a home last year, with 43% purchasing their property on their own, according to data from TSB.
In 2022, 54% of FTBs with TSB took out a joint mortgage, with 46% going it alone.
TSB noted an increase in the average mortgage term for first-time buyers, rising from 30 years in 2021 to 32 years in 2023.
Extending the mortgage term can help lower monthly payments, but it may result in paying more interest over time.
First-time buyers made up 35% of mortgage completions in 2023, with the average age of new homeowners dropping to 31 from 32 in 2022, according to TSB.
Video banking was the method of choice for nearly two-thirds (63%) of customers who purchased a mortgage directly from TSB in 2023.
Roland McCormack, TSB mortgage distribution director, commented: Across the UK, the drive to get onto the property ladder is bigger than ever with FTBs taking out extended repayment terms to acquire a home.
David Postings, the chief executive of UK Finance, recently mentioned that in 2023, a typical first-time buyer would have needed a 50-year loan term to achieve the same affordability as a 30-year mortgage in 2022.
Postings said previously: We looked at a typical FTB in 2022, which was a comparatively steady year, and the average mortgage term was 30 years.
But we then rolled forward the average change in house prices, mortgage rates and incomes to the middle of 2023. For that buyer to achieve the same affordability, as measured by their mortgage payments compared to income, they would have needed to borrow over a 50-year term, he added.
As rates increased through 2023 this calculation rose further, Postings said.
He added: A 50-year term sits outside any lender’s underwriting criteria and we are not suggesting we want mortgages of this length. This does, nonetheless, demonstrate why we have seen such a significant rise in longer term borrowing.
