37% of over 55’s are still paying off mortgage

Published: 02/04/2013

Over a million homeowners aged 55 to 64 and 289,000 aged over 65 still have an outstanding mortgage, according to equity release provider, More 2 Life.

Separate research by rating agency Moodys suggests over 50,000 borrowers over the age of 60 have an interest-only mortgage.

These figures have prompted further fears about the affordability of retirement, with calls for there to be a greater focus on finding solutions for people in and approaching retirement with an outstanding mortgage.

One existing solution is equity release; four out of five More 2 Life equity release customers used the fund released to clear mortgage balances.

Richard Espley, Head of Equity Release at Goldsmith Williams, comments:

“Approaching retirement with a mortgage still in tow is undoubtedly a worry for the majority of homeowners. Annuity rates have been steadily dropping for the last 18 years; the average annuity for a 65-year-old with a £100,000 pension pot is just £4920 compared to £7000 in 2008 and a whopping £11,380 in 1995 so a monthly mortgage repayment will take a considerable chunk of that.

“Meanwhile interest-only homeowners face an even tougher challenge with many admitting a failure to secure a realistic repayment plan.

“Equity release is one possible solution for homeowners who need help paying off a mortgage or who are looking to supplement an underperforming repayment plan.”

Content correct at time of publication