In the mortgage offers, some banks declare that they are ready to borrow money even for 40-50 years. But it turns out that not everyone. The longest repayment periods are reserved for the group of youngest borrowers.
And often up to 30 years old. – All because banks also apply another restriction, namely the maximum age of the borrower on the date of repayment of the last installment.
It turns out that each bank has its own rules regarding the maximum loan period. There are institutions where mortgage installments can be spread over 25 years at the most.
That’s how it is at Invest-Bank
In most banks, the loan period may reach 30-40 years. However, there are some players on the mortgage market who are ready to wait for the repayment of the last installment even half a century. For 50 years, we can take a loan from E-Money Bank, Good Credit Bank.
However, not everyone will get a loan spread over a very long period. The second factor that banks pay attention to is age. In most banks, it was assumed that the maximum age of the borrower on the date of repayment of the last installment should be no more than 70-75 years. There are, however, such institutions where even age 80 is allowed (E-Money Bank, Good Credit Bank).
Sometimes it is also possible to extend the repayment option by 5 years by buying life insurance – experts from Comperia advise. This possibility exists, among others at Good Finance Bank.
As a result, in many banks, a 45-year-old will not take a loan for 30 years, but at most for 25 years. Meanwhile, many people prefer to spread the loan over a longer period, because the installments are then lower than for shorter repayment periods (the longer the repayment period – the greater the number of installments, and thus the lower the capital portion).
It is true that when borrowing for longer periods
They will give away tens or hundreds of thousands of dollars more in total, but their monthly budget will at least not be charged. For example, a monthly loan installment of 300,000 USD with an interest rate of 7.5 percent, spread over 45 years will be 1,942 USD, and in the case of a loan for 25 years – 2,216 USD. However, taking a loan for 45 years will pay 748 thousand. USD interest, and a person paying back the same loan for 25 years – 365 thousand. USD.
But 20- or 30-year-olds may have trouble getting a loan for an extremely long period. There is another limitation. Recommendation SII, issued by the Polish Financial Supervision Authority. – It says unequivocally that the bank can grant loans for 30, 40 or 50 years, but only to borrowers who have the capacity that is large enough to be able to repay the whole of their liability in 25 years.