Saga: over-70s have £35n mortgage debt

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Older couple

Research by Saga Personal Finance suggests that four in 10 over 50s are paying off a mortgage worth on average £49,000.

According to the research, more than 900,000 people in their 70s still have an average mortgage bill of some £38,000, that means the over 70s have with a total mortgage debt of £35.2 billion.

And for 6.3 million over 50s with an interest only mortgage, who had intended to pay it off with an endowment policy, over two-thirds say their underperforming endowment will not foot the bill; some are having to contemplate selling their house to make up an average shortfall of more than £42,000.

A third of over 50s, would need to sell their house to make up the shortfall, according to Saga’s research. Two thirds of over 50s have made alternative plans to pay off their mortgage, often using a combination of options.

A third say they will dip into their savings, 22% say they have been making capital repayments to reduce the debt, 18% will use other investments to make up the shortfall and just over one in 10 have extended their mortgage to give them extra time to pay it off. However, more than one in 10, some 1.7m people, admit they have no way of bridging the gap.

Jeff Bromage, chief operating officer, Saga Personal Finance, said: “Being saddled with mortgage debt well into your retirement is far from ideal as it means keeping an eye on the coffers when you should making the most of life.

“Millions of British homeowners have been hit hard by underperforming endowments. Thankfully, there are options available. A growing number of people are turning to equity release in order to avoid selling their home, upping sticks is probably the least-favoured option for many facing a shortfall, as their home is so much more than bricks and mortar and will hold so many happy memories.

“If you’re over 55 and a homeowner, equity release could be a solution. It gives you access to money tied up in your home, giving you peace of mind and the freedom to enjoy your retirement properly.”

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