One in three will still be paying mortgage after retirement

One in three homeowners could still be paying their mortgage when they retire, a new survey today has shown.

Highlighting the depth of mortgage debt in the UK, the survey by Impartial.co.uk reveals that 1.4m homeowners over the age of 55 still have 10 years or more to run on their current mortgage, with the average amount owed by the so-called “baby boomers” totalling a whopping £55,046 on average and could be facing monthly repayment of more than £700.

Homeowers aged between 35 and 55 typically owe £92,153, repayable over 13.4 years, suggesting a monthly repayment of around £850 per month whilst unsurprisingly, the under 35s have the largest average debt – standing at £96,258 and have the longest average repayment term – 20.5 years. This means an average mortgage repayment of £675 per month – assuming they have a repayment mortgage rather than an interest only one.

Worryingly, 28% of homeowners aged 55 or over admitted to not taking any financial advice before taking out their mortgage.

Karen Barrett, Marketing Director of Impartial.co.uk, urged would-be homeowners to avoid saddling themselves with unmanageable debt when they make their first move onto the property ladder.

“This study suggests that many baby boomers are facing up the reality of still having a mortgage debt close to – or even beyond their retirement age,” said Barrett.

“It is crucial that the next generation of homeowners do all that they can to be debt free earlier – as this will give them much more financial freedom to prepare for retirement.

“Taking impartial, whole of market mortgage advice should help make sure that, whilst having the home that you want, you are also protected against having debts beyond retirement.’’