WITH the number of first-time buyers at a 25-year low, wannabe home-owners are considering ever more drastic measures to get on the housing ladder.

Rising prices have pushed many properties out of reach of first-time buyers. People are paying an average of £127,922 for their first home, according to Halifax. Based on standard lending criteria, that means people buying on their own with a 10% deposit would need to earn about £32,000 a year to secure a large-enough mortgage. A couple would need a total of about £41,000.

Would-be buyers are so desperate that research from Purely Mortgages, a broker, found that some people would be willing to take out a mortgage for 50 years to bring their payments down to an affordable level.

Mark Chilton at Purely Mortgages said: “Our research shows first-time buyers are having to look at more drastic ways to get a foothold on the property ladder, a trend that lenders are beginning to recognise.”

When they first take out a mortgage, the majority of borrowers opt for a 25-year term. However, you can go longer or shorter. The longer the term, the lower the monthly repayments. Purely’s research found that one in four aspiring first-time buyers would repay their mortgage back over 30 years, rather than the traditional 25, 6% said they would consider a 40-year term and 5% said they would go for 50 years.

People wanting a £100,000 repayment mortgage would pay £556 a month if they opted for a 25-year loan, assuming a mortgage rate of 4.5%. But if they extended the term to 30 years, repayments would be £507. They would drop to £450 over 40 years and £419 over 50 years.

Ray Boulger at John Charcol, a broker, said: “People tend to think of mortgages as 25-year products but there is no need to. However, the longer the term, the more interest you’ll pay.”

If you borrowed £100,000 on a repayment basis, you would pay £66,749 in interest over 25 years, at a rate of 4.5%. If you borrowed over 50 years you would pay £152,600 in interest.

Many who go down this route, though, have no intention of repaying their loan over 30 or 40 years. Instead, as their salary increases and their financial situation improves, they will reduce the term, or make overpayments.

Chilton said: “Opting for a longer term helps to improve affordability and can be useful for those looking to buy their first property. But we believe that borrowers should reassess their circumstances regularly, with the objective of shortening the loan term.”

Taking an interest-only rather than a repayment loan is another way for borrowers to minimise their monthly payments. These are lower because they are covering only the interest — they are not paying off any of the capital.

Someone looking to borrow £100,000 over 25 years at 4.5% would pay £375 a month interest-only, compared with £556 on a same-term repayment loan.

But if you go interest-only you will have to repay the capital that you borrowed in full at the end of the term. Borrowers are therefore urged to put an additional amount into savings each month so they have enough money to repay the capital.