A recent study has revealed that one in seven people are now left paying their mortgages into their seventies.
The research was conducted by Saga Equity Release Service and discovered that the average mortgage balance being paid by those aged 70 plus is £40,000. The study also revealed that one person in three is still paying a mortgage over the age of 50. According to experts, there could be several factors for this. One of the most common reasons is that large numbers of people took out interest-only mortgages earlier in life, without any savings or other investment income to repay the outstanding balance. Other people may have borrowed against the equity in their home, enjoying a better standard of living with the expectation that house prices would rise and they would be able to repay the debt. As people get divorced and start again later in life, this can also result in paying a mortgage as they enter their seventies.
There are various ways to ease the burden of paying a mortgage, including changing to a better deal. However, some lenders do place age restrictions on their products, which can hamper borrowers. The head of retirement at Sage Personal Finance, Alex Edmans, noted that millions of older people who have a mortgage are finding it harder to secure a competitive deal, which means there is less cash to enjoy retirement.
Seeking advice from a mortgage adviser who has taken a CeMAP course may result in a better mortgage deal, releasing some spare cash each month.