Later life mortgage lending jumped in the fourth quarter of 2024

Independent

27-02-2025

Some 35,840 new home loans were handed out to older borrowers in the fourth quarter of last year, marking a 28.2% annual increase, according to UK Finance.
Its later life mortgage lending report, which covers borrowers aged over 55, showed that lending totalled £5.6 billion in the fourth quarter, which was 38.6% higher compared with the same quarter a year earlier.
Within the total, there were 5,700 new lifetime mortgages advanced during the fourth quarter, up by 6.7% annually.
The value of this lending was £510 million, which was a 24.4% increase compared with the same quarter a year previously.
Some 343 retirement interest only mortgages were advanced in the fourth quarter, up 35.6% annually.
The value of this lending was £35 million, which was up by 34.6% compared with the same quarter a year previously.
A retirement interest only mortgage allows borrowers to pay just the monthly amounts of interest throughout the term of the mortgage until either the death of the last remaining borrower or when the last remaining borrower moves into long-term care.
With lifetime mortgages, monthly payments are not required. The mortgage is repayable upon death of the last remaining borrower or when the last remaining borrower moves into long term care. The interest accrues over the lifetime of the mortgage. However, many lenders will allow borrowers to make full or partial interest payments on a monthly or occasional basis.
Some previous concerns have been raised about how borrowing into later life could affect people's retirement plans. Older borrowers may also need to consider how the loan might affect the amount of wealth they may have to pass on to younger generations.
UK Finance's total lending figures also include general homeowner and buy-to-let home purchase loans and remortgaging.
Toby Leek, NAEA (National Association of Estate Agents) Propertymark president, said: 'Even with interest rates at relatively high levels, this report demonstrates that older people still feel confident enough to borrow money to finance their future home purchases.
'This trend is being reflected across all buyers, with the Bank of England's Money and Credit Report for December 2024 finding that net mortgage approvals increased to 66,500 in December.
'However, with the economic landscape remaining reasonably unsettled, many people's finances may be stretched meaning they need to borrow for longer, not out of choice but out of need.
'Much of the country will now be eagerly awaiting interest rates to track downward so that mortgages can continue to become more affordable, allowing others the chance to make their next home moves a reality.'