More and more Britons are facing the prospect of retiring with mortgage debt, as there’s been a notable rise in first-time buyers aged 45 and above.
New analysis by the mortgage overpayment app Sprive reveals that the number of first-time buyers in this age group has more than tripled in just four years.
Between 2023 and 2024, there were around 975,000 first-time buyers, with 827,000 purchasing their home with a mortgage. Of these, 11.5% were aged 45 or older.
That’s a sharp increase compared to figures from 2019 to 2020, when only 3.6% of first-time buyers were in that age bracket.
Several factors may be behind this delay in home ownership, including the difficulty in saving for a large deposit or hesitancy due to high mortgage rates. Others might have been waiting to receive an inheritance before buying.
These older buyers are not only getting on the property ladder later than usual, but many are also committing to longer-term mortgages that will likely extend into their retirement years.
In the past, 25-year repayment plans were standard, but now many first-time buyers are choosing 30- or 35-year terms to make monthly repayments more manageable amid high house prices and interest rates.
When applying for a mortgage, borrowers are asked if they plan to remain in work until the loan is repaid. In most cases, this isn’t an issue unless the loan term extends beyond the age of 70.
Some lenders will approve mortgages that run up to the age of 85, allowing more flexibility for older buyers.
Data from 2023 to 2024 shows that 85% of first-time buyers with mortgages chose terms longer than 25 years.
Among those, almost one-third – around 250,000 individuals – signed up for mortgage terms of 35 years or more.
Sprive’s estimates suggest that two-thirds of first-time buyers will still be paying off their homes well into their sixties.
Additionally, about one in 20 of these buyers are expected to carry their mortgage obligations into their seventies.
Altogether, the analysis indicates that around 547,000 of 2024’s first-time buyers will still be repaying their loans in their sixties.
A further 26,000 are expected to still have mortgage debt even after reaching their seventies.
This trend reflects a shift in the housing market, where later life borrowing is becoming more common due to rising costs and changing financial circumstances.
Today’s retirees are borrowing more
Borrowing among those aged over 55 is continuing to rise, according to recent figures released by UK Finance.
In the first quarter of this year alone, 38,510 new loans were granted to borrowers in this age group, reflecting a significant 34% increase compared to the same period last year.
Although this figure includes various types of mortgage borrowing, it also highlights a growing number of older homeowners turning to equity release as a way to manage their retirement finances.
Many people in later life are now using the equity they’ve built up in their homes to pay off existing mortgages, particularly when regular monthly repayments become too much to manage after retiring.
Between January and March 2025, there were 5,620 new lifetime mortgages taken out, marking an 11% increase year-on-year.
Additionally, retirement interest-only (RIO) mortgages saw a notable rise of 19% over the same 12-month period, showing a growing reliance on alternative borrowing options in retirement.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, warned that this trend could create significant challenges for older borrowers.
She noted that the increase in later life mortgage lending over the past year has added extra pressure to retirement planning, which is already a concern for many.
Having to meet mortgage payments during retirement, she explained, can be financially draining at a time when income is typically limited and budgets are already tight.
Ms Morrissey believes this upward trend in later life borrowing is likely to continue in the coming years, especially as rising house prices push people to buy homes later in life and commit to longer-term loans.
Even in the best of circumstances, many homeowners will still be repaying their mortgages well into their fifties and beyond.
While some may be able to work for longer and use their earnings to cover housing costs, others might benefit from unexpected financial windfalls to pay off chunks of their debt.
However, not everyone will have that option. As a result, many will be forced to make difficult decisions about their spending during retirement to stay financially afloat.
For those without a lump sum to rely on, overpaying their mortgage in small amounts during the loan term has become a practical way to reduce the repayment period and cut down on interest charges.
This approach, although gradual, can ease financial strain later in life and help borrowers reach a mortgage-free retirement.
Rise of AI makes for an uncertain job market
Sprive has issued a warning that the growing use of artificial intelligence could seriously disrupt people’s ability to repay their mortgages.
According to the Institute for Public Policy Research, up to 8 million jobs across the UK could be at risk from AI, particularly in white-collar professions.
This poses a real threat to older homebuyers who have taken on mortgages later in life. If they were to lose their income, managing repayments could prove far more difficult than for those who bought their homes at a younger age and have smaller balances left to pay.
Jinesh Vohra, chief executive of Sprive, described the situation as a “perfect storm” emerging within the housing market.
He explained that many people are only able to buy property later in life, often referred to as “wait to inherit” buyers who remain renting into their 40s while relying on financial help or inheritance to finally purchase a home.
By the time they do get onto the property ladder, house prices are higher than ever, and now there’s the added worry that AI could jeopardise their income security.
Vohra warned that carrying mortgage debt into retirement is becoming increasingly common, but it’s a risky position to be in, especially when future income is uncertain.
He raised the question: if someone’s mortgage lasts until they’re 70 but their job is made redundant due to AI in their 50s, what options do they have?
His message is clear – people need to start preparing now for the possibility of unstable income, and a key part of that is supporting borrowers to become mortgage-free as early as possible.
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