One in two mortgages will not be paid off until the borrower’s 65th birthday, the figures show.
According to a report by trade body UK Finance, around 52 per cent of new mortgage loans are being given to borrowers who will pay off the loan even after the milestone birthday.
In contrast, in 2014 only a third of new mortgage loans went beyond the age of 65.
Data from trade body UK Finance shows that around 52 per cent of new mortgage loans are being given to borrowers who will still pay off the loan after their 65th birthday
Longer mortgage terms and an aging population are driving this trend.
One option open to those who haven’t approved their mortgage and find they can struggle with repayments is an equity release.
This usually involves a lifetime mortgage, allowing people to borrow against their home and choose not to make monthly payments with interest until the home is sold, potentially after death. .
There are pitfalls and financial and legacy implications, so it is important to seek financial advice and consider this very carefully.
You can request a free guide to Equity Release here
Charles Rowe, director of mortgages at UK Finance, says: ‘The demand for mortgages from people over the age of 55 is increasing and will continue to grow as more people live and work longer.
‘Giving life loans both now and in the future will be imperative as existing homeowners look to later life products to access equity when they grow up.’
This comes amid a boom in the afterlife loan market. But experts warn of risks of borrowing past retirement
Once homeowners hit their sixties, they may no longer be able to work and may struggle with mortgage payments.
They may also be tempted to release some of their pension to pay off their mortgage.
Becky O’Connor, head of pensions and savings for Interactive Investor, says: ‘The trend of mortgage living into retirement means people need to invest even more in their pensions if they still want to leave work and continue to meet housing costs. ‘