Surge in first-time buyers over 45 will land millions with a mortgage in retirement
Millions more Britons face retiring with mortgage debt thanks to a surge in first-time buyers in their mid-forties and older.
The number of first-time buyers aged 45 and over has more than tripled in four years, according to the analysis by the mortgage overpayment app Sprive.
Of the 975,000 first time buyers in 2023 to 2024, 827,000 bought with a mortgage and of these, 11.5 per cent were aged 45 or over.
This was almost triple the figure in 2019 to 2020 when only 3.6 per cent were aged 45 or over.
While many will have delayed buying because they haven't been able to save a large enough deposit, others may have been put off by high mortgage rates or have been waiting for an inheritance.
Most of these buyers are not just arriving late to the ladder, but also locking themselves into decades of debt by taking out longer mortgage terms.
The norm was once for people to repay over 25 years, but now most first-time buyers opt for 30 or 35 year repayment terms as rising property prices and higher mortgage rates mean they need to spread the cost over more years.
Mortgage applicants are asked whether they plan to still be working at the age when their loan comes to an end, but it doesn't tend to cause a problem unless they will be aged 70 or older. Some lenders allow mortgages to finish up to the age of 85.
In 2023 to 2024, 85 per cent of mortgaged first-time buyers took on mortgage terms of more than 25 years.
Of these, almost a third, or 250,000 people, committed to 35 years or more.
Sprive estimates that two thirds of first-time buyers will be paying their mortgages well into their sixties while one in 20 will be in their seventies.
In total, Sprive's analysis found that at least 547,000 of 2024's first time buyers will be paying their mortgages in their sixties while 26,000 will still be in housing debt in their seventies.
Today's retirees are borrowing more
Borrowing is also on the rise among over-55s, according to UK Finance's latest figures.
There were 38,510 new loans advanced to borrowers aged over 55 in the first three months of this year, according to UK Finance's latest figures. This is a 34 per cent rise year-on-year.
While the figure includes all types of mortgage borrowing, the data also shows more borrowers are turning to equity release to help meet their living costs in retirement.
Some equity release borrowers use the wealth they have built up in their home to pay off their existing mortgage, because they can't afford the monthly repayments in retirement.
In the first three months of 2025, there were 5,620 new lifetime mortgages, up 11 per cent in a year, while retirement interest-only mortgages were up 19 per cent in a year.
Anyone reaching retirement age with a mortgage could find themselves even more financially compromised, according to Helen Morrissey, head of retirement analysis at Hargreaves Lansdown.
'Later life mortgage lending boomed over the past year, casting a significant shadow over our retirement planning,' she said.
'Having to find the money to pay housing costs in retirement can put real pressure on a budget that may already be under severe strain.
'Over the long term, we can expect these figures to keep increasing. Rising house prices mean people are getting onto the property ladder later and taking longer mortgages, so even if everything in life goes to plan, they will be paying their mortgage beyond the age of 55.
'Some will be able to work later and use the extra cash to meet these outgoings, some will have windfalls during their working life to help pay off lump sums, but others face difficult retirement spending choices.'
Without such a windfall, some choose to overpay their mortgage in small amounts throughout the term, to reduce its length and the amount of interest they will pay.
Rise of AI makes for an uncertain job market
Sprive also warned that the rise of artificial intelligence could also wreak havoc with people's mortgage repayment plans.
The Institute for Public Policy Research has said up to 8 million UK jobs could be at risk from AI, particularly in white-collar sectors.
If these older home buyers were to lose their income, it would be far more difficult for them to cope than for their peers who had got on the property ladder sooner and therefore had less to pay off.
'We're seeing the emergence of a perfect storm,' said Jinesh Vohra, chief executive of Sprive.
'People are getting on the ladder later in life – many because they are "wait to inherit" buyers who are stuck renting into their 40s, hoping for financial support or inheritance to break in.
'Then when they finally do so, they are paying more than ever for homes, and now face the risk of losing income security due to AI's disruption of traditional jobs.
'Carrying mortgage debt into retirement is becoming the norm - but it's incredibly dangerous when future income is uncertain.
'If your mortgage runs until you're 70 but your role is replaced by AI in your 50s, what happens then?
'We have to prepare for that possibility now - and that starts by helping people get mortgage-free sooner.'
Best mortgage rates and how to find them
Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs.
That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord.
Quick mortgage finder links with This is Money's partner L&C
> Mortgage rates calculator
> Find the right mortgage for you
To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C.
This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit.
You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes.
If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
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