Surge In Ultra-Long Mortgages Among Under-30s
Hundreds of thousands of homeowners have taken out mortgages in the last three years that they will still be paying off into retirement, estimates suggest.
A surge in mortgage terms beyond the state pension age has been seen, particularly in new home loans made to the under-30s.
Figures from the Bank of England show how the share of new mortgages with a later end date has increased.
Higher mortgage rates have led many people to choose an extended repayment period to control costs.
However, as they will be paying off their mortgage for longer, they will pay more interest so the overall cost is likely to be higher.
The figures emerged from a Freedom of Information (FoI) request made by Sir Steve Webb, a former pensions minister who is now a partner at pensions consultancy LCP.
The FoI request followed a Bank of England financial policy report that included mortgage data for the fourth quarter of 2023. Mr Webb requested the corresponding data for the fourth quarter of the previous two years.
The Bank of England's data shows that in the final three months of 2021, some 31% of new mortgages had an end date beyond the state pension age.
Two years later, some 42% of new mortgages had this end date during retirement, suggesting a rise in the popularity of longer-term loans.
Across the final quarters of all three years, nearly 300,000 new mortgages were in this category.
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