That’s according to UK Finance, which has published its later life mortgage lending update covering the first three month of this year.
The report looks at mortgages taken out by borrowers over the age of 55, including mainstream lending to older borrowers, as well as specialist products such as equity release.
There were 38,510 new loans advanced to older borrowers in Q1, up 33.5% year on year. The value of this lending was £6.1bn, which was up 42.6% compared with the same quarter a year previously.
Equity release boost
There were 5,620 new lifetime mortgages advanced in Q1, up 11.1% year on year. The value of this lending was £530mn, which was up 39.5% compared with the same quarter a year previously.
There were just 339 retirement interest-only mortgages advanced in Q1, but this was up 19.4% year on year. The value of this lending was £33mn, which was up 17.9% compared with the same quarter a year previously.
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Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Over the long term, we can expect these figures to keep increasing. Rising house prices mean people are getting onto the property ladder later and taking longer mortgages, so even if everything in life goes to plan, they will be paying their mortgage beyond the age of 55.
“Some will be able to work later and use the extra cash to meet these outgoings, some will have windfalls during their working life to help pay off lump sums, but others face difficult retirement spending choices.”Sarah Coles, head of personal finance at Hargreaves Lansdown, added: “The equity release market is on the rise again. It had fallen back a little, while rates were sky high, but cuts in interest rates mean it was climbing at the start of 2025 – powered by a combination of an aging population, a concentration of wealth in housing and increasing pension shortfalls.
“Lifetime mortgages still dominate the landscape – making up by far the majority of equity release deals. These allow people to borrow against their home, then the interest rolls up, to be repaid when the property is sold – along with the loan itself. However, we’re also seeing some growth in retirement interest-only mortgages, in which the interest is paid as you go along, so only the initial loan is repaid when you sell up or pass away.
They’re both an option for those with plenty of property equity and shortfalls elsewhere. Lifetime mortgages can work for some people who can’t meet everyday living costs from their pension, while retirement interest-only mortgages can provide a one-off injection of cash for a specific reason – such as home improvements or healthcare.
“However, neither of them should be entered into without fully understanding the implications for you and your family. There are some hefty fees, and the interest is higher than on a standard mortgage.”
