Home owners expect to be paying mortgage after retirement

August 9, 2016 by Brendan O'Neill

Home owners

According to a recent study, one third of borrowers aged 45 and above, don’t expect to have paid off their mortgage before the age of 65.

The research, conducted by insurance company Aviva, suggests that home owners are overestimating the amount of equity in their homes at retirement age. As property values continue to increase, more home owners are planning on using equity in their homes to boost their retirement funds.

However, the study found that a combination of external factors, including mortgage debt, helping children financially and living for longer, will lead to equity in a property being insufficient.

The research was based on a number of home owners aged 45 and above, and 70% said that the value of their property amounted to more than the combination of their pension, savings and investments. However, 80% wanted to remain living in their home for as long as possible, which would mean that equity release options were limited. More than 25% of home owners in this age category are concerned about paying off their mortgage debt.

The study indicated that younger respondents were more likely to view their home as a source of income in retirement, considering either equity release, downsizing or re-mortgaging. Most people in the survey wished to remain in their homes during retirement, while roughly half of respondents would consider downsizing to a more manageable property in retirement.

Mortgage advisers spend time on CeMAP training courses so that are qualified to help people make some of the most significant decisions of their life.