A warning has been issued to the record number of over 50s searching for cheap mortgage or remortgage deals.
Figures issued by Legal & General’s Ignite platform, used by mortgage brokers, show that searches for short term mortgages often used by over 50s have surged.
On average those aged over 50 still owed £217,065 when they looked to remortgage in the first quarter of 2024.
Average loan amounts have increased particularly sharply among re-mortgagers aged 51 to 55 the provider said, jumping by 18.9 percent from £197,343 in the first quarter of 2023 to £234,716 in the first quarter of 2024.
The number of over-50s looking for mortgages with a 16 to 20-year term shot up by 136 percent in the first quarter of 2024, compared with the same period a year earlier.
There was also a huge 156 percent increase in searches for 10 to 15-year re-mortgage terms among over-50s, over the same period.
Kevin Roberts, managing director, Legal & General Mortgage Services, warned customers about the pitfalls of taking on big remortgages at this point in their life and the knock on effect on retirement.
He said: “As our data has revealed, there is a significant increase in homeowners aged over 50 looking to re-mortgage on a term that is likely to spill over into their retirement, although how and when people retire looks to be changing.
“In a challenging and dynamic interest rate environment, a large uptick in re-mortgaging requests was perhaps inevitable.
“If interest rates remained low, many homeowners might have stayed put and renewed with their existing lender.”
But he said in a newly competitive market, more people are carefully considering their options “to ensure they can access the best rate possible”.
Sir Steve Webb, a former pensions minister who is now a partner at LCP (Lane Clark & Peacock), issued a warning too, stressing that some home buyers could be gambling with their retirement prospects by taking on ultra-long mortgages.
Emily Shepperd, Financial Conduct Authority (FCA) chief operating officer, previously said in a speech: “Alongside longer terms we also see a greater proportion of mortgages projected to mature around state retirement age. The projected median age of a first-time buyer at maturity is now 65 years old, up from 56 in 2005.
“The proportion of mortgage customers over 67 is currently less than 2% of all loans. By 2040 this rises to 5%, and by 2050 it is almost 10%.
“Lending into retirement is moving from a niche to a norm.”
