Around three million homeowners expect to still be paying back their home loans into retirement, with lenders responding by increasing the number of mortgages available for older borrowers.
One in five (21%) of mortgage holders worry that they’ll still be paying their mortgage off into retirement.
More than half (58%) don’t know how they’ll keep up with repayments when they’re no longer working and 53% of those are already over the age of 55, making it difficult to prepare in advance.
If you’d like to avoid having to keep paying your mortgage into retirement, here are a few things to think about.
Remortgaging your property can have a number of financial benefits, particularly for those who wish to become mortgage debt-free before they retire.
You may choose to remortgage to a deal with a shorter term, meaning you’ll pay off your debt sooner than originally intended. This is likely to see your monthly repayments increase and could incur fees, but a mortgage broker will be able to help you determine whether it’s a financially viable and cost effective solution.
If you’d like to increase the amount of money you’re paying towards your mortgage but you don’t want the formality and commitment that comes with remortgaging, making overpayments can be much more flexible. Whether you’d like to use savings, an inheritance or a bonus to pay off a lump sum, or make regular overpayments just after payday, overpaying on your mortgage can allow you to become debt-free much quicker than anticipated.
Not only can overpayments relieve you of the pressure to pay your mortgage in retirement, it can save you thousands of pounds in interest too.
If your home’s value has risen significantly since you first purchased it, it may be possible to venture down the equity release route. You’ll be able to free up some of the capital you have invested in the home in order to pay off the remainder of your mortgage.
If you’re unsure which route is right for you, please get in touch with the team at TaylorMade today. We’ll assess your finances before advising you on the most suitable option for you.