For many homeowners, the prospect of entering retirement mortgage-free is no longer a given. The Financial Conduct Authority (FCA) has noted that mortgages running beyond pension age are shifting ‘from a niche to norm.’
Former Pensions Minister Steve Webb recently highlighted:
“There is increasing evidence that taking out a mortgage which runs past pension age is an entrenched feature of the mortgage market rather than a temporary blip. This has profound implications for retirement planning.”
The financial challenge of rising rates
Higher mortgage rates are adding to the pressure. A November 2024 Bank of England report found half of all mortgage borrowers, roughly 4.4 million people, will face higher interest rates when refinancing over the next three years. Affordability checks and rising costs mean many homeowners can’t remortgage on competitive terms, leaving them stuck on expensive standard variable rate mortgages and with limited retirement funds.
The importance of seeking advice
Everyone’s financial circumstances are different, so it’s worth getting professional advice before making decisions. Whether it’s overpaying, switching lenders, exploring equity release or lifetime mortgages, understanding the impact of having a mortgage in later life is essential.
⚠️ Equity release and lifetime mortgages will reduce the value of your estate and can affect your eligibility for means-tested benefits.
What are your options?
While retiring with a mortgage is becoming more commonplace, there are ways to help manage the financial burden:
- Overpay your mortgage – overpayments can reduce overall interest costs and help clear the debt sooner – even humble overpayments add up
- Switch your mortgage – moving from an interest-only mortgage to a capital repayment option can pay off debt faster
- Consider alternative mortgage options – older borrowers (55+) have more choices, including lifetime mortgages, which let homeowners access equity while staying in their home.
In fact, for many homeowners, lifetime mortgages with no early redemption charges are ‘completing the lifecycle’ of owning a home for the rest of their lifetime, while helping to free up much-needed income during those retirement years.
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🚨 Data accurate as of the date of publication –27.05.2025
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q2 2025
