52% of new mortgages will end after borrowers turn 65


Findings from a new report commissioned by UK Finance reveal that 52% of new mortgages go to borrowers who will not have paid off their home loan by their 65th birthday.

Longer mortgages and an aging population are helping to boost the tendency to borrow later in life, and this is the first time this level of lending has been reached in an older age group, UK Finance said. The report also suggests that mortgages later in life are expected to become more common.

In 2014, only about a third of new home mortgage loans were past the age of 65, showing just how strong the growth has been in recent years.

Charles Roe, Mortgage Manager at UK Finance, noted:

“There has been a growing demand for mortgages from people over the age of 55 and this is expected to continue as more people live and work longer. For the first time since the records began, more than half of all new mortgages are due to end after the owner’s 65th birthday, and loans to over 55s have increased even where mortgages in the marketplace in the broad sense remained moderate.

“End-of-life loans both now and in the future will be imperative as current owners look to products later in life for access to equity as they age,”

Loan products later in life, such as equity release products, are increasingly popular as older homeowners seek access to equity in their homes. But those considering a stock release should exercise caution, UK Finance warned, as it could mean those who profit from these products will have fewer assets to bequeath to the younger generations when they die.

This growing popularity of borrowing later in life could also have implications for retirement savings, the report suggests, as some may need to use pensions to pay off their mortgages.

Jim Boyd, Managing Director of the Equity Release Council, commented on UK Finance’s findings, saying they

“Highlights the critical role that loans later in life play in the long-term security of consumers.”

“Attitudes towards real estate finance have changed later in life, and homeowners are increasingly comfortable with mortgage loans until retirement and open to the benefits of realizing a party. of their real estate assets as they age, ”he said.

“Real estate can play an important role in a holistic approach to financing retirement and, as an industry, we must work together to ensure that consumers get the information they need to weigh increasingly financial decisions. more complex to do this, “he added.

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