A mortgage to buy a house represents a significant outlay and a fixed monthly expense when the mortgage is added together. Extending the years of the mortgage is a way of reducing this monthly impact. In other words, reducing the instalment you pay on the mortgage, although at the cost of paying more total interest at the end of the loan.
In this post we are going to review whether there are public aids to apply for a mortgage or to deal with it and until when you can extend it.
Are there any public aids when taking out a mortgage?
Most public aid is focused on the purchase of housing in general, not so much on the financing vehicle in particular, the mortgage. This does not mean that there are not some specific programs.
The most important one at the national level is the State Plan for Access to Housing 2022-2025, which has a program to subsidize agreed loans. In other words, subsidizing part of the mortgage payment.
This state aid is then managed by the autonomous communities, which have their own assistance programmes for home purchases. Some of them do affect mortgages with measures such as public guarantees to finance 100% of the purchase of the home or special agreements with certain banks, as is the case of La Rioja.
Many autonomous communities have programs that reduce taxes for buying a home, especially for young people or large families. Some of these communities include, among others, Andalusia, Catalonia, the Canary Islands, Cantabria, Castile and León, Madrid, Navarre and the Valencian Community.
In short, if you are thinking about buying a home, you should check what housing programs your community has, both for purchasing and for mortgages.
How many years will it take me to pay off my mortgage?
The maximum duration of a mortgage depends on each financial institution and also on the type of mortgage. The longest maximum term ranges from 30 to 35 years.
The clear factor to know how many years of mortgage you can request is your age because most entities set a maximum age to finish paying off the loan. This maximum age ranges between 70 and 75 years. Thus, if you are 45 years old, you can request a 25-year mortgage, for example.
This period may also vary depending on the type of mortgage. Variable-rate mortgages are usually granted for longer periods, while fixed-rate mortgages tend to be shorter.
The reason is that it is more difficult for financial institutions to estimate how interest rates will behave over very long periods and that is why they limit the duration of fixed-rate mortgages. However, this again depends on the specific policies of each financial institution.
Always remember that extending your mortgage is a way of reducing the amount you pay each month. On the other hand, by extending your mortgage, you will also end up paying more interest in total.
Until what age can I apply for a mortgage?
As with the duration of the loan, the maximum age at which you can be granted a mortgage depends on each financial institution.
Legally, there is no age limit for applying for a mortgage , although there is an age limit up to which you will be granted a loan. In other words, financial institutions will not grant you a loan that extends beyond the age range of 70 to 75.
With this in mind, you can apply for and obtain a mortgage at 60 years, but at most it can have a term of 15 years. And the same applies if you apply for a mortgage at 50 years. The specific conditions and limits may vary depending on the financial institution.
In any case, remember that age is only one of the aspects that financial institutions take into account when granting a mortgage loan. There are other points such as financial stability, the percentage of the property to be financed or the value of the house itself.
What are you waiting for to discover your ideal mortgage to buy a home, renovate or build your own house?