"There is a significant increase in homeowners aged over 50 looking to remortgage on a term that is likely to spill over into their retirement, although how and when people retire looks to be changing."
- Kevin Roberts, managing director of Legal & General Mortgage Services
Broker searches reveal a significant increase in over 50s searching for remortgages with terms that will carry them close to or into retirement, according to research from Legal & General’s Ignite platform.
Data collected by the platform indicates that borrowers in the over 50s age bracket are researching mortgage deals that go far beyond a 10-15-year term. Among the over 50s customers, including customers of ages up to 70, searches for a 21-25-year term mortgage have increased by 50% from Q4 2023 to Q1 2024 and by 83% from Q1 2023 to Q1 2024.
The number of over 50s looking for mortgages with a 16-20-year term increased by 88% from Q4 2023 to Q1 2024 and 136% between Q1 2023 and Q1 2024.
The proportion of over 50s who have searched for mortgages with 10 to 15-year terms has increased by 44% from Q4 2023 to Q1 2024 and by 156% from Q1 2023 to Q1 2024.
When compared against the entire sample, which includes remortgaging customers from age 18 to 70, the overall proportion of over-50s who searched for a remortgage option remained consistent year on year. In Q1 2023, 28% of all remortgage searches were ordered by a customer aged over 50, the same as Q1 2024.
According to UK Finance data, the average first-time buyer will be paying off their loan until the age of 64 – the oldest age since records began in 2005. The findings also coincide with a growing trend of people working longer and often transitioning into retirement gradually. The proportion of people working past their 65th birthday has doubled since the turn of the century from 5.2% to 11.5% in 2023 according to analysis by the Centre for Ageing Better.
In addition, average loan amounts increased the most among remortgagers aged between 51 and 55, climbing up by 18.9% from £197,343 in Q1 2023 to £234,716 in Q1 2024. The year-on-year increase reflects a tangible rise in the volume of older remortgagers liable to carry large amounts of mortgage debt well past retirement age.
Remortgaging activity across the board up by 153%
The increase in remortgaging activity is not limited to the over-50s. Between Q4 2023 and Q1 2024, there was a 53% increase in the levels of remortgage activity across the UK market. When comparing Q1 2023 to Q1 2024, activity saw an even greater increase of 153%.
According to the data, the average age of a remortgage customer in 2023 was 43.6. The 18-30-year-old age category saw the largest growth in searches between Q4 2023 and Q1 2024 with 66%. However, the second largest growth in activity was in the 56-65-year-old age bracket, with 65% in total growth.
This was followed by the 31-40-year-old and the 51-55-year-old age brackets which each saw a 54% increase from the previous quarter. 51-55-year-olds grew from 713 to 1,100 and 31-40-year-olds grew from 2,244 to 3,455.
Kevin Roberts, managing director of Legal & General Mortgage Services, commented: “As our data has revealed, there is a significant increase in homeowners aged over 50 looking to remortgage on a term that is likely to spill over into their retirement, although how and when people retire looks to be changing. In a challenging and dynamic interest rate environment, a large uptick in remortgaging requests was perhaps inevitable. If interest rates remained low, many homeowners might have stayed put and renewed with their existing lender. But in a newly competitive market, more people than ever are carefully considering their options to ensure they can access the best rate possible."
