Half of new mortgages end after borrower’s 65th birthday
Later life mortgage lending (lending to borrowers over age 55) is increasing in popularity.
New mortgage lending to homeowners with a term ending past the main borrower’s 65th birthday makes up more than 50 per cent of all homeowner loans, according to UK Finance.
The trade body for banks said this is the first time this proportion has been reached since records began, and it shows that ‘later life mortgage lending is set to become more significant in the future’.
This is partly due to an ageing population, but it’s also because mortgage terms have been getting longer over the last 15 years, to make homeloans more affordable amid high house prices.
Over the past five years, mortgage lending to over 55s has continued to grow, said UK Finance, even where lending in the wider mortgage market has remained subdued, in part due to older borrowers having strong affordability.
Within the wider later life lending market, lifetime mortgages (also known as equity release products) have continued to grow in popularity over the past seven years as older homeowners look to access the equity in their homes.
Charles Roe, director of mortgages at UK Finance, said: “There’s been growing demand for mortgages from those aged over 55 and this is set to continue as more people live and work for longer.
“For the first time since records began more than half of all new mortgages are due to end after the homeowner’s 65th birthday, and lending to over 55s has grown even where mortgage lending in the wider market has remained subdued.
“Later life lending both now and in the future will be imperative as existing homeowners look to later life products for accessing equity as they get older.”
Jim Boyd, chief executive of the Equity Release Council, added: “Property wealth can play an important part in a holistic approach to funding retirement and, as an industry, we must work together to ensure consumers get the information they need to weigh up increasingly complex financial decisions to do this.”