Many people approaching retirement are finding dreams of an exotic holiday or new car beyond their reach, as around seven million over-50s are still paying off their mortgage, according to research by the Saga Equity Release Advice Service.
Despite working hard and saving all their life, one in three over-50s still has a mortgage and on average they will need to find £50,000 to own their home outright and be mortgage free.
While many of those in their early 50s still have years of working life to chip away at their debt, around one in seven people in their 70s are faced with having to use their weekly pension to pay off what’s owed. On average these people have £40,000 left to pay.
Read our tips for paying off your mortgage
Over-50s fear that they will struggle to get a new mortgage deal
Shopping around for a new mortgage could help people pay it off quicker but around one in three over-50s say they have never tried to renegotiate their mortgage. Perhaps many haven’t shopped around for a better deal because they think they won’t be able to get one because of their age.
In fact, one in ten over-50s say they are concerned about their lenders maximum borrowing age and it appears they are right to be worried as one in 14 (7%) say they have been prevented from moving their mortgage to a more competitive deal because of their age.
Read more about securing a mortgage when you are over 50
Is there an alternative to standard mortgages?
Alex Edmans, Head of Retirement at Saga Personal Finance, commented: “Millions of older homeowners have found themselves abandoned by mortgage lenders and stuck in uncompetitive deals because of the unfair age restrictions that many lenders have in place. If these people had access to a better deal they wouldn’t have to pay as much back each month which would leave them with more money to enjoy their retirement.
“For those in retirement struggling to meet their monthly mortgage costs it may be worth considering a lifetime mortgage to help ease the burden of the monthly repayments.”
What is equity release?
Alex added: “This may not be suitable for all, so it is well worth speaking with a specialist adviser, who would consider all alternatives and review whether any state benefits could help provide some relief. It is also extremely important that people discuss their options with their family or loved ones and we advise our customers to do this before taking out a lifetime mortgage.”
Find out more about the benefits you could be entitled to in retirement.