• 28% of homeowners surveyed would consider a lifetime mortgage
  
• A quarter of those surveyed found fixed early repayment charges reassuring when considering taking out equity release

Research from investment, protection and retirement specialist LV= reveals that growing numbers are expecting to be making mortgage repayments after the age of 65.

The LV= Wealth and Wellbeing Research Programme* - a long-term quarterly survey of 4,000 UK adults – highlights attitudes towards mortgages and retirement. It reveals that:

• 32% of mortgage holders don’t think they will pay off their mortgage by age 65
• One in ten retirees still had mortgage debt when they retired
• The average mortgage debt outstanding at retirement was £38,000
• 63% of those who retired with an outstanding mortgage debt had to pay the mortgage debt with their pension

In recent months, mortgage costs have soared due to rising rates affecting people in different stages of life. Those in retirement would likely benefit the most from being mortgage-free if inflation continues to rise, due to living on a fixed income.

People are more likely to turn to equity release as inflation continues to rise
As equity release has become mainstream, consumers are much more considered about how they could use Equity Release products to better suit their needs and lifestyle in later life. Unlike traditional mortgages, borrowers can choose to manage the interest on their equity release loan through early repayments despite higher rates at outset. Equity release customers also benefit from security of tenure, meaning that the homeowner can stay in the property until they die or go into long-term care. LV= research shows that:

• 28% of homeowners would consider a lifetime mortgage, 3% said that they already have a lifetime mortgage
• 31% of those who would consider a lifetime mortgage said that they would be more likely to because of the current economic conditions. This increased to 45% for those with a household income of £100,000 or more
• The features of equity release that those surveyed found reassuring were downsize protection (33%), the ability to transfer the lifetime mortgage to another property if you moved home (32%), the lifetime mortgage being provided by a well-known financial services brand (29%) and fixed early repayment charges (25%)

Borrowers can repay up to 10% of their lifetime mortgage early without incurring early repayment charges (ERCs). Almost a quarter (24%) of people said that they would find this feature reassuring. LV= Lifetime Mortgage Lump Sum and Drawdown+ customers are able to make unlimited repayments each mortgage year, totalling up to 10% of the total amount of loan advances (excluding additional borrowing) at the date of the repayment without being subject to an early repayment charge.