Recent research carried out by the Post Office shows that one in three UK homeowners are expected to still be paying off their mortgage in their 60s. For homeowners over 55, using an Equity Release Calculator to find out how much cash you could unlock from your home is increasingly becoming a more attractive retirement option. The Post Office study showed that an increase in house prices combined with the difficulty of saving for a deposit means that many buyers aren’t entering the housing market until their early thirties (later than generations before them).
If you compare this with the previous generation who on averaged cleared mortgages by the age of 51, the effects of the credit crunch are stark. John Willcock, head of Post Office Mortgages, stated: “One of the major financial changes that has occurred over recent generations is when we might get to pay off our mortgage. “Whereas older generations have often lived mortgage-free for decades, for younger homeowners, who are getting onto the housing ladder in their thirties, the end of a mortgage is now being delayed”.
However, homeowners over 55 are slowly beginning to show more confidence in the housing market. Combined with their increased need for cash; to clear mortgages, pay off debts or simply enjoy a more comfortable retirement, the Equity Release Mortgage market has seen an increase in sales of Equity Release Schemes.
Equity Release Mortgages enable borrowers to unlock tax-free cash against their home, without needing to pay monthly repayments. Instead the debt is cleared when the homeowner sells the property, moves into long term care or dies.