A mortgage is one of the most important financial commitments a person can make, and as such, many will want to pay it off while they still have a steady source of income. However, an investigation by Hargreaves Lansdown has shown that this goal is increasingly distant for the British. With one in six people expecting to be over 65 when they pay off their mortgage, the average age of people expecting to pay it off is 59.
Of course, paying off the mortgage later in life is likely to become more common these days.
With house prices soaring, many will get their first foot on the ladder at an older age, and as a result, with a standard 25-year tenure, they will have financial worries later than previous generations.
Indeed, as Coles points out, it may only take a weird “life hiccup” for payments to last into your 60s.
But paying a mortgage until retirement doesn’t have to be a disaster for those faced with the prospect.
“We need to stay on top of when the mortgage is due, so that we can build our larger financial plans around it.”
Some Brits may choose to pay too much as a solution to getting off their mortgage at a faster rate.
However, it should be noted that overpayments can usually only be offset up to a value of 10 percent each year.
Likewise, remortgage at a lower interest rate could mean that more monthly payments will go towards paying off the total.
However, the British may need to keep working until they pay off their mortgage.
This means that retirement plans may have to be pushed back, but doing it as early as possible can avoid last-minute disappointments.
Finally, releasing home equity might be an appropriate option, but it is often not considered for the faint of heart as advice is usually needed.
Indeed, the loan will be cumulative and will have to be repaid after the death of a person, and over a longer period, the loan can increase considerably.