Fears for elderly people with mortgage debt

Fears have been raised for elderly people who are still sitting on large amounts of mortgage debt and could be at risk of losing their homes.

A report by Bristol University and the International Longevity Centre (ILC-UK) found that about two-fifths (40 per cent) of people aged 75 and over and who still have a mortgage to pay off have an interest-only mortgage with no linked investment with which to pay their loan back. This figure dropped to just six per cent for people aged between 50 and 54 who still have a mortgage.

Interest-only mortgages, which allow borrowers to pay off the capital only when the mortgage term ends, have become much more thin on the ground since the boom years amid concerns about people not being able to pay back their debt.

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Earlier this year, the Financial Conduct Authority found that home owners have been failing to put enough money aside on up to half of the 2.6 million interest-only mortgages which are due for repayment over the next 30 years.

The Bristol University/ILC-UK research found that among everyone aged over 50 with an outstanding mortgage, the average amount still owed was £62,200.

At least 14 per cent of older mortgaged households had taken on a new home loan or extended their mortgage in the last couple of years, the report found.