Financial anxieties driven by mortgage affordability and accessibility in the over-55s are rife, reports Perenna. Specifically, over a quarter (28%) fear they wouldn’t be able to afford their mortgage if moved onto their lender’s SVR. An additional 36% would find it difficult to manage repayments. This brings the total who could struggle to almost two-thirds (64%) and potentially putting many into financial distress.
Lenders’ term limit restrictions for older borrowers
As a consequence, later life borrowers are left with few other options than to sell or downsize if facing issues. Over a third (37%) are considering selling their homes to relocate or downsize. This rises to nearly half in London (48%), where property prices are 34% higher than the average property price in the UK.
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Lenders usually place end of term age limit restrictions for older borrowers trying to secure a new mortgage or remortgage. As a result, nearly two-thirds (60%) believe there is a lack of choice and financial products tailored to them. Over a third (36%) find their mortgage restrictive because of their age profile, being fundamentally excluded from the mortgage market.
The situation raises concerns about an increase in financial exclusion. As life expectancies rise, the demand for mortgage products that cater to older demographics grows. Perenna reports that 18% state that mortgage repayments have restricted their ability to travel or engage with leisure activities.
A further 17% report an impact on their financial stability and ability to support their family. Meantime, 9% have postponed retirement plans to pay off their mortgage.
Perenna launches Retirement Interest Only mortgage for 55+ age group
Arjan Verbeek, CEO and co-founder of Perenna said: “The current UK mortgage market is ageist. A whole demographic is being unfairly excluded and left behind, because of their age. We think that is wrong. The lack of options available for over 55s is underpinned by a fear of being trapped in their provider’s SVR. This is putting many in financial distress. This shouldn’t be the case. Retirees should have solutions available to live the lives they desire and deserve. Our new long-term fixed rate retirement interest-only mortgage is a step towards financial freedom for older homeowners.”
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By GlobalDataThe research comes as Perenna launches its Retirement Interest Only mortgage for those aged 55+ that want flexibility and optionality.
