Mortgage-free before retirement? Not likely!
A third of UK homeowners will still be paying off their mortgage in their 60s, according to latest research.
The study, conducted by the Post Office, highlights the impact buying property later on in life can have on our twilight years.
Sizeable deposits mean the average age of a first time buyer now stands at 33. This means an average homeowner taking out a 30-year term will still be paying of their mortgage in their early 60s without even considering remortgaging or moving to new, potentially bigger property. This is quite a difference from the previous generation who, on average, enjoyed a mortgage-free lifestyle by the age of 51.
As a result many may be forced into delaying retirement.
Richard Espley, Head of Equity Release, comments:
“Many things have contributed to the rising age of an average first time buyer. While the industry is starting to address this dire situation [lender National Counties last week launched a mortgage which could be taken by borrowers up to the age of 80] these products are few and far between and do not solve the problem many older homeowners have – paying a mortgage with a somewhat meagre retirement income.
“Equity release could be the answer to many homeowners approaching retirement with a mortgage still in tow. By releasing some of the equity tied up in their property they could be able to pay off their remaining mortgage and retire as planned.”
Content correct at time of publication