London, England -- (SBWire) -- 11/19/2010 -- The number of pensioners with mortgages is rising relentlessly, accoriding to new research from the Saga Group. There are already a quarter of a million people over 65 who are still repaying mortgages and that figure could rise to a million within five years.
“A lot of pensioners are relying on endowment policies or lump sums from their pensions to pay back their mortgage debt, but these things have just not worked out,” says Ros Altmann, director general of Saga.
A generation of SKIers (‘spending the kids’ inheritance’) have kept on living the high life, even when their earning ability has dipped. The so called ‘gravers’ (grey ravers) have kept on dipping into their equity pot, beyond the stage where they could hope to repay it in their lifetimes.
“Instead, they are continuing with their mortgage well into retirement, using their bricks and mortar to raise cash to live on, and to help their children and gradchildren with their own property purchases,” says Melanie Bien of mortgage broker Private Finance.
An estimated 1,071,000 British people between 55 and 64 still have mortgage debts, while a recent study for the Council for Mortgage Lenders estimated that half of all home owners aged over 50 have mortgage terms that stretch beyond the age of 65. Two-third of these said they intended to remain in debt indefinitely.
The prospect of people being forced to sell their homes in order to pay routine bills is an uncomfortable one, but an increasingly likely scenario. Should interest rates rise to any extent, from their current historic lows, it would place many hundreds of thousands of people in financial jeopardy.
It’s certainly interesting that banks appear to be more willing to lend to older customers, despite their declining ability to repay. Presumably they calculate that older people are less likely to default, and that people are in any case living longer these days.
How long before we get mortgages that last until we’re 100?
Original content can be found at The Mortgage Advisory
Grey Mortgages on the Rise
The number of pensioners with mortgages is rising relentlessly, accoriding to new research from the Saga Group. There are already a quarter of a million people over 65 who are still repaying mortgages and that figure could rise to a million within five years.