More people reaching retirement age with outstanding mortgage

The number of people reaching retirement age with mortgage debt is on the up, according to Age Partnership. The UK's biggest lending adviser for the over-50s said that 33%  of its customers in the first half of 2021 still had a mortgage, up from 28% last year. In March 2018 the Financial Conduct Authority (FCA) changed its rules to effectively relaunch a type of interest-only mortgage aimed at over-55s. Retirement interest-only (RIO) mortgages have a fixed rate for life and allow a borrower to repay the capital at death, through the sale of the property, meaning those with mortgage debts can stay in their homes. The FCA said it "could be an appropriate solution for older consumers with borrowing needs and good pension income". David Hollingworth of the mortgage broker L&C said: "The regulator realised that RIOs could help to address the concerns around interest-only borrowers that had no repayment vehicle and were coming to the end of their mortgage term.

The Sunday Times (22/08/2021)