Taylor Scott International News
Nearly one in three people with a repayment mortgage in the UK won’t repay it until they’re 60 or older, new research suggests, and it means they may have to delay retirement plans. 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 and of these, nearly one in 20 will be aged over 70, according to the research conducted on behalf of mortgage and secured loans broker Ocean Finance. The firms says that still be repaying a mortgage after retiring is a worrying situation to be in, as home owners will no longer have a regular salary coming in and will have to rely on their pensions and savings to clear the remaining debt. The fact that more than a million people in the UK will still be repaying a mortgage when they’re over 71 years old is of particular concern. The age of the average UK home owner 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. In the UK, the default age of retirement has now been phased out and most people have the right to continue working for as long as they want to. However, long term mortgage commitments mean the equivalent of seven million home owners 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 with 18.7% in this position. 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. ‘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,’ said Ian Williams, spokesman for Ocean Finance. ‘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,’ he explained. ‘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… Taylor Scott International
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