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Is a Mortgage Free Retirement Becoming a Pipe Dream?

Updated: 4 days ago


One in five homeowners aged 55 or over do not expect to retire mortgage-free according to data from the Equity Release Council.

Its survey shows that an increasing number of people are likely  to have mortgage debt well into their retirement.

These survey results suggest that more than half a million older homeowners (around 572,297 people) will still have their mortgage after they retire. The survey also found that a further 19% where “unsure” whether they would be able to clear mortgage debt ahead of their planned retirement date.

When looking across all age groups, the survey found that two-thirds of mortgage holders believed they would clear this debt before retirement.

Higher mortgage debt at an older age is fuelling demand for later life lending solutions. The survey — conducted in conjunction with Canada Life — found that one in three consumers said accessing property wealth in later life could improve their finances and boost their retirement income: a rise from 25% in 2021.

There has been a significant growth in the number of over 55s taking out equity release plans between 2019 and 2024, with 201,575 new plans takeout over this five-year period.

This is a 30% increase on the previous previous five-year period, when 155,082 new plans were taken out between 2014-2018.

The survey also found that higher mortgage rates were making it harder for many people to make additional retirement savings. Equity Release Council CEO Jim Boyd says the spike in mortgage costs is putting a strain on people’s longer-term financial resilience.

“We need to recognise we are in a new era where the goal of becoming mortgage free will, for some people, be less important than the practical need to access property wealth in later life. With approximately £2.6 trillion of net housing wealth in homes owned by people aged 65 or over, there are clear signs that a shift in the national conscience is underway and property wealth is stepping into the spotlight for retirement planning conversations.”

At Viva Retirement Solutions, we are experts in later life mortage solutions, so why not contact us today to arrange a free no obligation consulation. We can guide you on the best later life mortgage solutions for you, to enable you to enjoy your retirement.

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