The Rise of Mortgage Repayments into Retirement: What It Means for Homeowners
- Penn Financial
- 6 days ago
- 2 min read
The number of homeowners paying their mortgages into their 70s has surged by 156% in recent years, highlighting the increasing financial pressures reshaping homeownership. According to recent data from the Financial Conduct Authority (FCA), over 22,000 mortgages with 35-year terms were sold to buyers over 36 years old in the first nine months of 2024 alone, up from just over 15,000 in 2018.
At Penn Financial, we understand that rising property prices, higher interest rates, and shifting economic trends are making long-term borrowing a necessity for many. But what does this mean for homeowners, particularly those approaching retirement?
The Shift Towards Longer Mortgage Terms
Traditionally, mortgages were structured to be repaid before retirement. However, affordability pressures and changing life circumstances mean more people are extending mortgage terms into their later years, including into retirement past the statutory retirement dates.
Key factors contributing to this shift include:
Rising House Prices. Homeownership is increasingly expensive, particularly for those entering the market later in life.
Higher Interest Rates. Increased borrowing costs push homeowners to stretch repayment terms for lower monthly payments.
Delayed First-Time Buying. The average age of first-time buyers continues to rise, making it more likely they will still have mortgage debt in retirement.
The Financial Impact on Retirement
While longer mortgage terms can provide short-term affordability, they come with significant financial trade-offs like higher lifetime interest payments, later retirement and reliance on private pensions and savings. The current full state pension is approximately £960 per month, far below the average mortgage repayment for a £250,000 loan over 35 years. Without adequate retirement planning, some may struggle to maintain financial stability.
Navigating the Challenges: How Penn Financial Can Help
For those considering longer mortgage terms, strategic financial planning is crucial. At Penn Financial, our expert advisers can help homeowners assess longer-term affordability, explore all possible options available and alternative lending solutions and plan for a secure retirement.
If you are concerned about managing your mortgage into retirement, our specialists can provide tailored advice to help you stay financially secure.
Get in touch with us today to discuss your options.
Lux Mathiy
0207 183 5938
The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.
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