24% of over-55s with outstanding mortgages anticipate continuing repayments after leaving full-time employment, according to Key Advice

The growing cost of mortgages in the UK is creating significant difficulties for homeowners aged over 55, according to equity release specialist Key Advice.

Recent analysis suggests that individuals on average incomes who have purchased property within the past two years are now allocating nearly half of their monthly earnings to mortgage repayments—the highest proportion seen since the financial crisis of 2008.

The figures reveal a widening gap between wage growth and house price inflation, with average salaries rising by 237% since 2000, compared to a 345% rise in average house prices. Key Advice said this trend presents both risks and opportunities for homeowners approaching or in retirement.

Research conducted by the firm found that 24% of over-55s with outstanding mortgages anticipate continuing repayments after leaving full-time employment. Key Advice emphasised that those nearing the end of fixed-rate mortgage terms may be particularly exposed, as higher repayments are taking up a greater share of monthly income.

The company has called on mortgage advisers to broaden the range of products they present to clients in this age group, including later life lending products, or to establish referral partnerships with experts in this field.

The UK’s rising mortgage burden which is resulting in borrowers on average earnings spending the highest proportion of their monthly income on mortgage repayments since 2008 shows the need for innovation in both products and advice, said Rachel East, senior director at Key Advice. Mainstream mortgage advisers need to widen the options they offer to older customers or work with later life lending specialists who can do so.

Irrespective of scope of advice limitations, Consumer Duty obligations require advisers to have comprehensive conversations and make customers aware of all the options available to help them achieve a good outcome. Older customers should not be worrying about their mortgage burden rising when there are innovative products available to relieve the pressure and which offer flexibility around repayments to allow cost of borrowing to be managed, she said.

She added: Mainstream mortgage advisers, and wealth or investment advisers, need to recognise the innovation that has taken place in the lifetime mortgage sector and ensure that all options are considered when dealing with older customers.