Mortgage providers to better understand retiree mortgages
12/06/2015
The International Longevity Centre-UK (ICL-UK) has reached out to mortgage providers to better understand and respond to the increasing number of retirees looking to apply for mortgages.
The director of ICL-UK, David Sinclair, has urged mortgage providers to actively make sure they are not discriminating on the basis of age alone when considering mortgage applicants. He also advised older people to carefully consider different options available to them before looking to “buy to let” to give them a return on their pension savings.
The number of mortgages extending into retirement is continually increasing. A report by ICL-UK found that one in five of all households (21%) headed by someone aged 50 or over had an outstanding mortgage on their main home in 2008-10. One in ten older households with someone aged 65 or older had outstanding mortgage borrowing on their main residence, while 65-69 year old households with mortgage debt still owed on average £55,200.
David Sinclair said:
“The industry and the regulatory environment have been seemingly struggling to respond to ageing and demographic change. We are, however, very pleased to see that the industry have begun to respond to these challenges through the important work being led by the CML.
"We are living longer, our family structures are changing, we are marrying later and we are working longer. At the same time, financial insecurity will result in more people needing to borrow more and later in life. We should be particularly worried about those retirees with interest only mortgages but no linked investment.
"Whilst the introduction of “pension freedoms” could be a boon to the buy to let sector, older people should make sure they take advice before making the jump.”
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