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Forty per cent of over-65s have interest-only loans: More 2 Life

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More than 40 per cent of homeowners over 65 years old have interest-only mortgages, according to research from More 2 Life.

The lender says 41 per cent of the age group have such a loan. Within that, nearly 40 per cent are 65-74 years old and the remainder are over 75.

More 2 Life also says the growth in average unsecured debt levels for over 75s was higher than for any other age group.

For the 75-84 age group, average unsecured debt rose 201 per cent from £162 in 2006-2008 to £487 in 2012-2014.

For the over-85 age group, debt levels rose 218 per cent from £36 to £115 over the same time periods.

More 2 Life managing director Dave Harris says: “This new research shows that the number of interest-only mortgages among older homeowners will continue to be an issue as these begin to mature in the next decade.

“Demand for alternative later life lending on this scale has the potential to double the equity release market this year alone.

“For many of these individuals without an alternative capital repayment strategy, retirement lending and in particular lifetime mortgages will be the solution to their finances.”

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  • Carl McGovern 5th July 2017 at 10:49 am

    So long as the Retirement Income of the people on these Interest Mortgage, is sufficient to allow them to make payments, I don’t see this as an issue. Some lenders now take the view that no maximum age limit, is applied, if retirement Income validates the Mortgage. I would say that in the right circumstances, this can actually be a valuable financial planning tool, when it come to reducing, potential long term care costs and Inheritance tax planning. With Southern Property prices being as high as they are a £1million property on it’s own can lead to a hefty IHT bill. Why not allow a sizeable Interest only Mortgage in a situation like this, which reduces the estate and is merely repaid by the Estate on death? After all if rates and fees on none lifetime Mortgages are at the current much lower rate, it presents a viable alternative to them.