A Fifth Of UK’s Homeowners will still be paying their mortgage in retirement

According to recent figures a fifth of UK’s homeowners will still be paying off their mortgage after they stop earning a wage – with many of them living in a negative equity house.

The startling figures reveal the legacy of interest-only loans and delayed first-time buying are starting to kick-in as these loans start coming to an end.

In worrying figures, in the UK alone around three million people now expect to still be repaying their home loan after the current state retirement age of 65 – research from online broker L & C Mortgages has found.

High house prices, interest-only and part interest-only borrowing, and getting on the housing ladder later than previous generations all play their part in delaying the day homeowners pay off the last of their debts.

And a third of mortgage holders believe they will be older than they had expected by the time they clear their debt – often because they’ve had to cover the costs of raising and supporting a family.  It seems the bank of Mum and Dad is still going strong!

And around 60 per cent of those who will still have an outstanding home loan in retirement have no plan in place as they get older for paying off their mortgage once they stop earning – which is a worrying statistic.

That’s a major concern as it could leave many of the UK’s older generations having to exit the property market in retirement altogether.

And David Hollingworth from L&C said: “The fact that people increasingly have to work beyond their standard retirement age to pay off their mortgage is a concern. 

“Many will see a dip in income post-retirement which could pose affordability issues for older borrowers. Although homeowners will, and should, continue to aspire to pay off their mortgage before retirement, the reality for many could mean having a mortgage for longer. 

“It’s clear that homeowners will shift their priorities depending on family needs. For example, so many first time buyers are reliant on the Bank of Mum and Dad. However there still needs to be a clear focus on the repayment of the mortgage, to avoid reaching a point that could force the sale of the family home.” 

And more worrying news as 40 per cent of all those on an interest-only or part interest-only mortgage believe they will not be able to pay the remaining sum once their term ends. 

When former interest-only mortgage holders have managed to pay off their loan, almost half relied on endowment policies and a third used savings or investments to do it. 

“Repayment of an interest-only mortgage that once seemed a million miles away may now be looming large for those that haven’t set capital aside,” adds Hollingworth. 

“That may force the need to refinance and extend the mortgage term. Mortgage options for those that can demonstrate ongoing affordability are growing in number so it makes sense to seek advice sooner rather than later.”

CD Fairfield has a 99% score with and excellent relationships with lenders throughout the UK. As such, we’re here to lend a helping hand and offer solutions to free you from your negative equity.

And CD Fairfield Director Tom Cardwell explains why it is a good idea to sort out your negative equity house sooner rather than later.

“If it is an issue, you have to deal with it sooner rather than later. Hopefully, the stigma attached to the issue has reduced over time. 

“We are very active in putting out good content in terms of what is happening in the industry and where the mortgage market is at.

“Ans it would have been very difficult to purchase a property 10 or 12 years ago and not be in negative equity today.

“So it wasn’t that people in negative equity have made some horrendous financial choice, or some reckless financial decision.

“They simply bought a property at the wrong time. It was just a matter of timing. First-time buyers in the last six or seven years don’t have this problem. They don’t have to worry about it.

“And it certainly is not something that was restricted to those with low incomes. We have clients where the household income was well in excess of one hundred thousand pounds.

“But they still have a debt issue and it is something that they will have to address. The first thing to do is recognise there is a problem. 

“The second thing to do is seek some assistance and the third thing you have to remember is that the client was a victim of an economic crash and it is not something they have done.

“If someone is worried about negative equity? No matter what the level of their negative equity they should get in touch with us. We can put their mind at ease. We can explain to them exactly what their position is and we don’t engage in flannel or false hopes. In an empathetic fashion, we tell people where they stand.”

Here are some reviews from the people we have helped.

M Anderson

“Like many people, my house had been purchased at a time when banks were handing money out like sweets. We had an interest only mortgage and when my marriage ended, we needed a way to separate financially.

“A colleague recommended Negative Equity NI to us, they do every bit of the work required, removing the stress from you. The staff were great and kept in regular contact at each stage.

“In the end, I have paid 11% of the shortfall, with the result that I can now sleep a lot easier! I would and have recommended NENI to others and would continue to do so.”

C Weir

“Lesley has been so helpful, She has shown knowledge on the subject of bankruptcy, very personable and showed me empathy when I was stressed with bankruptcy proceedings. Also all my questions were answered in a timely manner and nothing seemed to much trouble for her. I would have been lost, without her expertise.”

M Bennett   

“I would recommend Negative Equity to anyone. I bought a two-bedroom semi-d at the height of the boom for a very high figure. Then came the crash. I got married, had a child and the house was to small for us but not worth even half what I paid for it when put on the market 10 years on.

“The bank simply wouldn’t deal with us so we approached Negative Equity NI. I just wish I had heard of them sooner! They were well worth their fees – spending around £4k saved us over £50k as they engaged with the bank to negotiate our shortfall to a manageable figure we should have paid off in a few years.

“We’re also out of the house, having been able to buy a new one as part of the process. That would never have happened if we’d tried to embark on this on our own.

“We were quite nervous and tentative about going down this route but it certainly paid off and we are very grateful to Tom and Lesley for all their attention and assistance throughout the process. They have lifted a millstone from around our necks and we can now move on.

R Mark

 “I first came across negative equity NI while watching tv, they had an advert on! I thought surely this is a con or too good to be true… ITS NOT!!

“Myself and my husband bought back in the boom, the house itself was worth half of what we paid for it and we felt like we were stuck with the negative equity. We are now free!!!

“From the moment we met with the team we knew we were going to get out of the hole we were stuck in, and just last week this happened.

“We got over 60% of our negative equity written off. The team know exactly what they are doing, extremely professional and have fantastic knowledge and the ability to get brilliant results.

“I would like to say a huge thank you to all the team who worked tirelessly to get this end result. Thank you again”

Speak to Bob today on 0161 660 4403 to see how we can help you with your negative equity house.

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