Be mortgage free with equity release

Published: 03/10/2013

Equity release could offer some much needed relief to older homeowners who have an outstanding mortgage on their property.

Latest figures from The Personal Finance Research Centre and think-tank on demographic change, the International Longevity Centre UK has revealed one in five homeowners over the age of 50 still owe money on their mortgage with the average sum standing at £62,200.

The research also found:

• 13% of older homeowners are struggling to repay their mortgage debt
• 9% of household with a remaining mortgage are headed by someone in their late 60s
• One in fifty households, headed by someone in their 80s, have yet to pay off their mortgage
• At least 14% of older mortgaged households have taken out a new mortgage or extended their loan within the last two years.

In addition to this 40 per cent of the oldest mortgaged households have an interest-only mortgage and no repayment plan. Richard Espley, Head of Equity Release at Goldsmith Williams, comments:

“We were all aware that many older homeowners faced a retirement with an outstanding mortgage but these latest figures suggest things are considerably worse than initially perceived.

“The fact that so many households still owe a large proportion of their mortgage and have limited financial options available to address the problem, particularly those on interest-only, is startling.

“Equity release though could prove to be a saving grace for many. By allowing homeowners to unlock some of the funds tied up in their property and retain their right to live there, equity release could provide the necessary funds older homeowners need to enjoy a mortgage free retirement.”

Content correct at time of publication