More than 1.3m over-55s still pay mortgage

More than 1.3 million over-55s households are still paying mortgages with 289,000 over-65s owing money on their home loan, research by equity release lender More 2 Life reveals.

Its analysis of households in England and Wales shows 18% of owner occupiers aged 55+ have still to clear their mortgages pointing to a growing risk of people carrying substantial debts into retirement.

Jon King, managing director of More 2 Life, said: “There clearly is a potential mortgage time-bomb with homeowners paying off loans way past traditional retirement dates.

“For many that it is not an issue but for substantial numbers on interest-only deals there is a looming repayment date when they will have to repay the money they have borrowed.

“The worry is that many are just hoping for the best which is why regular warning letters from lenders will help concentrate customers’ minds. Lenders themselves already acknowledge it is a major issue and many are concerned.”

The research shows 289,000 of 4.34 million households in the 65+ age group – equivalent to 6% of all households - are still paying mortgage while among the 55 to 64-years-old age group around 37% of the 2.77 million households have still to pay off their mortgages.

The analysis comes after separate research from ratings agency Moodys estimated that around 52,000 borrowers aged 60+ have interest-only mortgages and equity in their house of less than 20%.

Peter Lawrence at Lawrence Rand said: “These figures are clearly concerning and demonstrate the reasons why taking professional mortgage advice is vital for anyone buying a property. Our mortgage advisers will be pleased to assist with any queries.”