4th November 2014
Half a million over 50s may have to sell their home to pay off their interest-only mortgage.
Four in 10 over 50s are paying off a mortgage worth on average £49,000,according to a survey by Saga Personal Finance.
Its research also found that more than 900,000 people in their 70s still have an average mortgage bill of £38,000 and a collective mortgage debt of £35.2 billion.
More than 6 million over 50s with an interest-only mortgage, had intended to pay it off with an endowment policy, but two thirds say their underperforming investment will not foot the bill.
Some are having to contemplate selling their house to make up an average shortfall of more than £42,000.
A third of over 50s, would need to sell their house to make up the shortfall, while the remainder 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 10% say they have extended their mortgage to give them extra time to pay it off.
Jeff Bromage, chief operating officer, Saga Personal Finance, said: “Being saddled with mortgage debt well into your retirement is far from ideal as it means keeping an eye on the coffers when you should making the most of life.
“Millions of British homeowners have been hit hard by underperforming endowments.”
He added that equity release may be an alternative to selling up for many home owners.