Most people expect to still be paying mortgage in their 60s

A survey has revealed most homeowners believe they will still be paying a mortgage when they turn 60.

Just 38% of people believe they will have their mortgage paid off before they reach 60, and 29% expect to be repaying their mortgage when they are 65 and over according to a survey by Royal London and iReach.

Before the outbreak of Covid-19, the survey asked 1,000 respondents, across all demographics nationwide, at what age they believe they will have paid off their mortgage.

"First time buyers are getting older, and it’s not uncommon to see people in their mid-thirties entering large value, 35-year mortgages," said Joe Charles, Head of Proposition at Royal London.

"Unless they overpay during the term of their mortgage, many won’t have cleared this debt until they are into their late sixties or early seventies. Such a scenario could seriously challenge their repayment capability in retirement, particularly if they haven’t an adequate pension to rely on."

Highlights from the Royal London survey include:
• 31% of people who are now 55 or older say they’ll be paying their mortgage past 65.
• On average, 43% of those aged 18 to 44 believe that they will pay off their mortgage before they reach their sixties.
• As people come closer to retirement, they are more likely to realise that for them, paying off a mortgage before they reach 60 will not be achievable.
• Of those 18–24-year olds who have a mortgage, just 16% say they’ll be paying it in their seventies.

Figures from the Central Bank of Ireland show there are 23,165 people over the age of 70 in Ireland who are still repaying their mortgage to one of the five main banks. The statistics also show that almost 10% of these loans are in arrears.

"While we can never plan for everything that life has in store for us, and the current crisis we are experiencing is clear evidence of that, it’s important to ensure that we have sufficient income in retirement to meet the expenses we expect to have," Mr Charles.

"Those who carry a mortgage into their sixties or seventies will need to ensure that they have sufficient pension income or other income/savings to meet those mortgage repayments in addition to funding their day to day living expenses.”