35% of UK homeowners expect to be well into their 60s before they finally pay off their mortgage, according to new research by Post Office Mortgages.
This compares to the situation a generation ago when the average age of becoming mortgage-free was just 51 years old.
High house prices and the challenge of saving for a deposit have also meant that many homeowners are making the first step on the property ladder much later than their parents did – taking out their first mortgage at an average age of 33.
Other homeowners are pushing back outright ownership by remortgaging and using the equity in their home to fund other expenditures, the survey revealed. 18% stated that they have remortgaged to improve their current house or buy a second home, while 8% have done so to support their children.
12% are sure they will not be able to keep to their current mortgage term, while a further 14% are worried about meeting their mortgage terms.
However, the dream of owning our own homes outright remains as strong as ever, with 79% saying this is something they wish to achieve.
John Willcock, head of Post Office Mortgages, said: “One of the major financial changes that has occurred over recent generations is when we might get to pay off our mortgage.
“Whereas older generations have often lived mortgage-free for decades, for younger homeowners, who are getting onto the housing ladder in their thirties, the end of a mortgage is now being delayed.
“For many, the flexibility that remortgaging offers means they often use their mortgage to invest in additional properties or improve their current home – again pushing the age up.
“Wider societal trends, such as multi-generational living, higher divorce rates, and the need to pay for university fees are also having an impact and pushing back the age at which we might finally be able to say we truly ‘own’ our homes.”
The research also found that 75% of homeowners said they expect to pay off their mortgage in line with their original mortgage term, which on average is 22 years. And for those who have been able to pay off their mortgage already, the average time it took was 17 years.
Willcock added: “Clearly there is a growing number who wish or need to continue to repay a mortgage until later in life, but equally there are lots of homeowners that say they are ready and able to pay off their mortgage much earlier.
“Our findings, for instance, showed that on average homeowners in the UK expect to have paid off their mortgage before retirement – at age 54.”
