According to research from Sprive, of the 827,000 first-time buyers who bought with a mortgage in 2023-24, 11.5% were aged 45 or over. This is almost triple the 3.6% figure recorded in 2019-20.
The report added that around 16,000, or 1.6% of, first-time buyers with a mortgage were over 65, whereas in 2019-20, this number was not significant enough to record.
Sprive added that not only were more first-time buyers older when they got onto the property ladder, but they were locking in to longer mortgage terms.
Around 84.9% of first-time buyers with a mortgage took on a mortgage term of over 25 years, with nearly a third committing to around 35 years or more. This is equal to around 702,000 and 520,000 first-time buyers respectively.
Sprive estimated that around 547,000 of 2024’s first-time buyers will be paying off their mortgages into their 60s, and around one in 20 could be paying off their mortgage into their 70s.
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The report stated that almost a third of first-time buyers in 2024 received a gift or loan from family or friends to buy their first home, rising to over a third of 25-44-year-olds.
Around 9.2% relied on inheritance, doubling to around 18.9% of those aged 45-64.
Only 59.5% of 45-64-year-olds were able to buy using savings alone, compared to 90% of those under 35.
Sprive noted that the advent of artificial intelligence (AI) and automation was also “disrupting traditional career paths”, so some homeowners could face uncertain future income.
‘Emergence of a perfect storm’
Jinesh Vohra, CEO of Sprive, said: “We’re seeing the emergence of a perfect storm. People are getting on the ladder later in life – many because they are ‘wait to inherit’ buyers who are stuck renting into their 40s, hoping for financial support or inheritance to break in. Then, when they finally do so, they are paying more than ever for homes, and now face the risk of losing income security due to AI’s disruption of traditional jobs.
“Carrying mortgage debt into retirement is becoming the norm – but it’s incredibly dangerous when future income is uncertain. If your mortgage runs until you’re 70 but your role is replaced by AI in your 50s, what happens then? We have to prepare for that possibility now – and that starts by helping people get mortgage-free sooner.”
Sprive is a free mortgage app that has cashback deals with over 80 retailers, so users can earn mortgage overpayments by doing their normal weekly shop through the app.
Based on a monthly food shop of £500, someone with a mortgage of £250,000 on a term of 30 years at 5% could save £5,770 in interest and take seven months off their mortgage.
The company also offers an Auto Save feature, which analyses users’ spending and sets aside an affordable amount each week that they can use to overpay their mortgage. The firm said users could save around £10,817 in interest.
Vohra said: “Mortgages are one of the biggest financial commitments most people will ever make. The system wasn’t designed for people to be paying them off in retirement. We’re on a mission to change that.
“Overpaying is the best way to clear your mortgage quicker – and pay less in the long run by cutting down the amount of interest. However, with rising costs and increasing mortgage rates, most people don’t have the extra cash to pay off their mortgage faster – and that is how Shop with Sprive can help.
“It doesn’t push people into spending more than they would otherwise – or at retailers they wouldn’t usually use – because we’ve focused on partnering with brands that our customers are likely to use on a regular basis.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Older first-time buyers and longer mortgage terms rising in popularity are risking debt into retirement
