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Cheap mortgages to help avoid retirement repayments

Date: Thu, 11 May 2006

Shopping around for a cheap mortgage deal could help homeowners to manage their monthly repayments and avoid having outstanding mortgage debts in retirement.

According to a YouGov survey conducted for Scottish Widows, one in six pensioners who own their own home are still paying off their mortgage, owing an average of £45,313 to mortgage lenders.

The bank found that a third of mortgage-paying retirees have debts of over £50,000 and a staggering one in ten still owe more than £100,000.

And the growing number of pensioners with outstanding mortgage debts is putting pressure on their retirement incomes, Scottish Widows said.

Those who have paid of their mortgages before they retire can increase the amount of money they put into their pension pots, whilst those who are still struggling with mortgage payments are not in the position to do so. Instead they are relying on equity release schemes or remortgaging to fund their retirement.

And according to Murdo McHardy of Scottish Widows, this trend is only going to continue as young people find it increasingly difficult to get on the housing ladder before the age of 35.

"It is important for those people who will be reaching retirement in the next few years, and still have debt outstanding on their mortgage, to consider how best to prepare themselves for the eventuality of having to juggle their debts on a reduced income when they stop working," he said.

This is where a cheap mortgage can help, so that homeowners can enjoy peace of mind in retirement without worrying about outstanding debt on their properties.

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Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.