A third of homeowners with repayment mortgages will not have finished repaying the property loan until they have reached their retirement years, according to recent research conducted on behalf of mortgage and secured loans broker Ocean Finance.
The survey indicates that, of the people who know they have a repayment mortgage, 31.7% will not have finished paying it off until they are aged 61 or over. Of these, 4.5% will be aged over 70 – which is older than the UK’s current state pension age.
The age of the average UK homeowner when they finish paying off their repayment mortgage is between 51 and 60 years old. However, for nearly one in three mortgage holders this goal is further off, and not something they will achieve until they are aged over 60, should they continue making repayments at their current rate.
Long-term mortgage commitments mean the equivalent of seven million homeowners will still be tied into a mortgage after they’ve reached 60, and so may have to abandon their personal retirement aspirations in favour of staying in employment for longer than they originally planned.
Across the country, repayment mortgage customers living in the East Midlands are most likely to still be paying off the debt when they are over 61 years old (18.7%). Meanwhile, residents of the South West are the most likely to have paid off the entire debt, with just 7.8% of mortgage holders here set to still be repaying it once they are past their 61st birthday.
Ian Williams, spokesman for Ocean Finance, said: “It’s great that most people will have repaid their mortgage before they retire, but the fact that nearly one in three mortgage customers will still be repaying it once they’re aged over 61 is worrying.
“Not long ago, most homeowners would have paid off their mortgage by the time they reached their 50s and so could enjoy living a few years mortgage-free before they retired, or even choose to retire early. But as the average age of first-time buyers continues to rise, millions are now in a situation where they won’t have finished repaying their mortgage until they’re about to retire.
“For those that can afford to do so – and where the provider allows it – overpaying the mortgage each month can knock years off the term of your mortgage, which could help ensure it’s cleared well before your planned retirement date.”
