Research by Saga Personal Finance shows that four in 10 over 50s are paying off a mortgage worth on average £49,000.
According to Saga’s research more than 900,000 people in their 70s still have an average mortgage bill of some £38,000, that means the over 70s are saddled with an extraordinary total mortgage debt of £35.2 billion.
In addition, 6.3 million over 50s with an interest only mortgage are struggling to pay it off with an endowment policy. More than two thirds say their underperforming endowment will not foot the bill. Having purchased one in the prudent hope of clearing their mortgage and allowing them to live the retirement which they had dreamed of, some are having to contemplate selling their house to make up an average shortfall of more than £42,000. But a third of over 50s would need to sell their house to make up the shortfall, according to Saga’s research.
Two thirds of over 50s have made alternative plans to pay off their mortgage, often using a combination of options. A third say they will dip into their savings, 22% say they have been making capital repayments to reduce the debt, 18% will use other investments to make up the shortfall and just over one in 10 say they have extended their mortgage to give them extra time to pay it off.
However, more than one in 10, some 1.7 million people, admit they have no way of bridging the gap.
Another solution for people who have no idea how they are going to clear the mortgage or who are facing the decision to have to sell a home they do not want to part with could be to use equity release to clear the debt.
