Thu 28 Apr 2016
Young people have still not given up their dream of home ownership but many are likely to still hold a mortgage in retirement, Halifax has claimed.
The lender’s 2016 Generation Report, found that 300,000 first-time buyers climbed on to the property ladder in 2015 with an average age of 30.4.
But many could be pensioners when it comes to paying off their mortgages.
The data showed many are taking out 30-year term home loans.
This means home owners could still be paying off mortgage debt during their 60s when traditionally they would be enjoying the golden years of retirement.
In 2007 the proportion of first-time buyers taking up a 35-year mortgage stood at 16%. By 2015 this figure had grown to more than one-in-four (26%). Over the same period, the share of mortgages with a 20 to 25-year term dropped from 48% to 30%, according to the report.
The report found one in three young people don’t expect to pay off their mortgage until after their 60th birthday – while 6% still expect to be paying their mortgage over the age of 70. Another 8% expect to be paying their mortgage throughout their life.
Of slightly more concern, just 34% of survey respondents in the report expect to work beyond retirement age to pay their mortgage, while 44% are worried they won’t be able to afford the repayments.
Craig McKinlay, mortgages director at Halifax, said: “Despite the barriers and the understandable concerns, it’s very positive to see that younger generations are still striving to get on to the housing ladder, with more than 300,000 taking that first step in 2015.
“This recovery has been fuelled by a number of factors, including an abundance of successful Government initiatives and the affordability of monthly mortgage repayments due to the continuing low interest rate environment and some very competitive deals.
“Although many of those late to the ladder will inevitably still be paying their mortgages later into life, they are increasingly taking a range of measures to ease the burden.”
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