One in three still paying off mortgage in their 60s

One in three of us will still be paying off mortgages in our 60s, compared to the generation before which cleared their mortgages at an average age of 51.

Research conducted by the Post Office has showed how the economic changes bought about by the credit crunch are beginning to alter the lives of those yet to retire.

Due to higher house prices and the difficulty of saving for a deposit, the average age of the first time buyer has also risen to 33 – much older than their parents’ generation.

Head of Mortgages at the Post Office John Wilcox said:

“One of the major financial changes that has occurred over recent generations is when we might get to pay off our mortgage.

Whereas older generations have often lived mortgage-free for decades, for younger homeowners, who are getting onto the housing ladder in their 30s, the end of a mortgage is now being delayed.”

Those left with property debt later in life also include those who have re-mortgaged their properties to pay for large expenses such as home improvements or university fees and those who have been affected by divorce.

To address the issue the Financial Services industry is gearing up to cater for those with high debts approaching retirement age.  One lender has already launched a mortgage that could be taken out by borrowers up to the age of 80.

Despite the rise, Government initiatives such as the Funding for Lending scheme have helped make mortgage deals slight cheaper with the average fixed rate five year deal now falling below 4% across the whole market.

The Financial Conduct Authority (which recently replaced the Financial Services Authority) has also raised concerns about the number of borrowers who have interest only mortgages and no way of paying off the loan when it ends due to endowment shortfall or lack of savings.

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