A third of homeowners who get on the housing ladder later in their lives are unsure if they’ll be mortgage-free after they retire.

45% of homeowners younger than 40 said that they purchased their first home’much earlier’ than expected. This compares to 29% for those older.

32% of homeowners who have a mortgage say that they don’t know if they can pay back their loans by retirement or they already think they won’t be able to. This is due to the increase in average age for first-time buyers.

Debt-free dream: Paying off a mortgage by retirement is set to become increasingly uncommon, according to new reserach by industry body the Equity Release Council

The Equity Release Council, an industry organization that studies debt and retirement plans says it is possible to live a debt-free life.

One fifth said it was impossible to retire mortgage-free.

The Equity Release Council, which is a group of lenders that offer mortgages for a lifetime to anyone who wants to cash out their house, found this to be the case.

This research revealed that attitudes about carrying debt later in life have changed.

Just 25% of the 5K homeowners who were surveyed stated that it was okay to pay off their mortgages past age 65. Nearly half said their generation had a more positive attitude towards debt than their parents.

Even though they were able to climb the ladder later than other generations, younger homeowners had more assistance raising their deposit than their parents.

According to the research, 43% of first-time homeowners with mortgages under 40 relied upon financial support from friends and family to help them buy their home. Only 23% were over-40.

Paying a mortgage in retirement is no longer a taboo, according to Jim Boyd of the ERC

Jim Boyd from the ERC says that it is now acceptable to pay a mortgage during retirement.

70% of homeowners with mortgages felt satisfied with the amount of their mortgage debt. This number rose to 34% for those 50 and older. 

Jim Boyd, the Equity Release Council’s chief executive, stated that there are many signs that paying your mortgage in retirement should not be considered taboo. It can allow you to enjoy a comfortable life and support family members while avoiding financial hardship.

Many homeowners are able to make the most of their property assets to enhance their retirement experiences by using it as a way to pay off a mortgage or build an asset. 

“Lifetime and retirement mortgages enable people to maximize the value of their property as both a source of income as well as as a place of residence.

Are you considering resigning with a mortgage?

A home is a great way to save money for retirement. 

Some homeowners may not have to repay their entire mortgage.  

Stephen Lowe (group communications director, Just Group retirement mortgage lender) said that people should have money to invest in the future, however, with most not making enough contributions to their pensions, it’s likely that property value will play a greater role in earning retirement cash.

‘The (median) amount of wealth in active or preserved pensions for people aged 55-64 was just over £91,000 according to official figures up to 2018, which suggests income from private pension wealth will be relatively modest.

‘However, with an average property price of around £250,000 currently and about three-quarters of retirees owning their own homes, there is scope to see the home as a financial ‘power pack’ in later life.’ 

According to the Equity Release Council, people believe that taking out a mortgage later in life would be a benefit. 

32% saw it to be a means to increase their lives, and 31% to get funds for family members.

It also revealed confusion among young homeowners regarding what mortgage products they could choose later in life. 42% of those under 40 said that they didn’t understand their options.

This is Money provides information on how to use your home as a retirement savings account. 

Remortgage an existing loan

Banks are becoming more willing to provide an ordinary mortgage for older borrowers.

All building societies in Leeds, Monmouthshire and Leek have an age limit of 85 by the end of their term.

The maximum age for Nationwide is 75. If the loan exceeds 50 percent of its value, it can be extended to 95.

Remortgaging is one way for owners to access cash tied up in their homes in later life

One way owners can get cash held in their homes is through remortgaging

The homeowners may then be eligible to remortgage with a greater loan-to value and save money for retirement. 

Rates do not differ depending on age. 

Retirement interest-only mortgage 

The latest addition to the later-life borrowing possibilities is retirement interest only mortgages. The maximum amount of money you are allowed to borrow is between 50% and 70% of your home’s worth.

The interest is all you pay, making the mortgage less expensive for the borrowers when they retire.

It doesn’t matter if the homeowner passes away or moves into long term care.

If the original mortgage agreement has ended, it can be repaid earlier and without penalty. Some lenders provide overpayment options.

RIO mortgages can be useful for those who have an existing mortgage, but have stopped working and are looking for a more affordable option. 


The equity release loan, also called a lifetime mortgage, allows homeowners to access money from their homes for whatever they want. 

You could use this money to pay off any mortgage debts, to fund retirement, or even to get loved ones on the property ladder. 

To apply for the loan, you must be at least 55 years old. However, the loan is not due until the borrower passes away or becomes a long-term caregiver.  

No repayments are required. Instead, interest is accrued and added to the loan. Although rates can still be higher than conventional mortgages, these are now much lower than the traditional ones and may even drop to 3%.  

Customers are urged to do their research and consider all of the different options before they decide on what to do with their mortgage and home into retirement

Before making a decision about what to do with your mortgage or home in retirement, customers are encouraged to research all options.

To be fair, equity release loans had a history of interest pile-up for those who borrowed them. Modern equity release mortgages allow for optional interest payments as well as the ability to repay the loan with no penalty in the event that a spouse dies.

The loan will require borrowers to be able to pay off the remaining mortgages on their homes in order to benefit from the new one.  


It is possible that your property’s value has risen if you own it for a long time. 

What it is and how to do it

This is Money has teamed up with Age Partnership. Age Partnership is an independent advisory firm that specializes in retirement mortgages as well as equity release. 

Age Partnership can compare deals from all markets and help you determine if equity releases are right for your needs or if there are other options. 

Age Partnership advisers are also able to help you determine if your existing equity release agreements can be renegotiated and saved money. 

>> Find about equity release and get a free no-obligation guide   

It is possible to sell the property and then use the equity you have built up for the repayment of the loan.

Additionally, borrowers may be left with enough money to fund retirement. 

It is important that customers consider all options before making any decision. 

Andrew Morris, senior equity release advisor at broker Age Partnership said: ‘As everyone’s situation is unique, product choice and flexibility is crucial to ensure that they can find a solution that best fits their individual needs. 

The vast majority of the clients I talk to have some type of mortgage debt. A lot of them want to stop paying their monthly mortgage payments. Others just need to know that they will not be penalized if their health worsens. 

“I look at the various options, including downsizing and RIOs. A standard mortgage for retirees. Equity release. It’s about finding the right solution for each person.’

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