Around 28% of over-55s fear they will not be able to afford their mortgage if they moved onto the standard variable rate (SVR).
According to research from long-term fixed rate specialist Perenna, another 36% of over-55s said they would find it difficult to manage repayments, which the lender said would bring the total who could struggle to almost two-thirds.
More than a third of over-55s – 37% – said they would consider selling their home or downsizing, and this goes up to almost half in London.
Perenna said that lenders usually place end-of-term age limit restrictions on older borrowers trying to secure a new mortgage or remortgage.
Approximately two-thirds believe there is a lack of choice and financial products catering for them, and more than a third find their mortgage restrictive due to age profile.
Perenna said that this raises concerns of an “increase in financial exclusion”, and nearly a fifth said that respondents said mortgage repayments had limited their ability to travel or engage in leisure activities.
An additional 17% report an impact on their financial stability and capability to support their family, and 9% have delayed their mortgage to repay their mortgage.
‘A whole demographic is being unfairly excluded’
Perenna recently brought out a retirement interest-only mortgage and interest-only option targeted at borrowers over the age of 50, available up to 60% loan to value (LTV), with pricing beginning from 5.84%.
Arjan Verbeek, CEO and co-founder of Perenna said, “The current UK mortgage market is ageist. A whole demographic is being unfairly excluded and left behind because of their age. We think that is wrong.
“The lack of options available for people over 55, underpinned by a fear of being trapped in their provider’s SVR, is putting many in financial distress. This shouldn’t be the case. Retirees should have solutions available to live the lives they desire and deserve. Our new long-term fixed rate retirement interest-only mortgage is a step towards financial freedom for older homeowners.”
In an interview with Mortgage Solutions, Colin Bell, Perenna’s founder and chief operating officer, said that its no-maximum-age criteria were attractive to brokers and could cater for customers aged over 55.
