Nearly half (44%) are worried they won’t be able to afford their mortgage payments in retirement, while one in three (34%) expect to work beyond the retirement age to pay off their mortgage.
Young people are worried about paying for their retirement due to being delayed getting on the housing ladder, Halifax’s 2016 Generation Rent report has found.
Nearly half (44%) are worried they won’t be able to afford their mortgage payments in retirement, while one in three (34%) expect to work beyond the retirement age to pay off their mortgage.
Craig McKinlay, mortgages director at Halifax, said: “Borrowers should be cautious when looking to extend their mortgage beyond 25 years. This will not only increase the overall cost of the mortgage, but could have a potential knock on impact on their quality of life in retirement.
“A longer term will reduce monthly payments, but as homeowners build up equity they should look to reduce this term or make overpayments to ensure that the dream of owning their own home doesn’t turn into an unnecessary nightmare in later years.
“A £50 monthly overpayment to a mortgage of £140,000 spread over 25 years will reduce the term by two and a half years and save more than £7,500.*
In 2007 the proportion of first-time buyers taking up a 35-year mortgage stood at 16%, however by 2015 this figure grew to more than one in four (26%).
