New data from specialist lender Hodge shows a significant increase in the number of its 50+ customers taking out a mortgage for debt consolidation in January this year compared with January 2022.
The data shows that in January 2023, 18% of customers said they were using the loan for debt consolidation, compared with just 2.13% in January last year.
January 2023 saw the highest proportion of people using a 50+mortgage for this purpose in the past 12 months, in contrast to a low of 4.4% in June 2022.
When it came to taking out a 50+ mortgage for home improvements, that has more than halved in comparison with last January, when 17% of 50+ Hodge mortgage customers said they were using funds for home improvements. In January 2023, that number had dropped to 6%.
Hodge’s data also revealed that in the past year, the number of people taking out a 50+ mortgage to give as a family gift fell to its lowest point in January 2022 at only 4.26%, but that figure more than doubled in October 2022, with 12.5% using the funds for a family gift.
Emma Graham, business development director at Hodge, said: “As you’d expect, the reasons our over 50s customers give for taking out a mortgage vary greatly. In particular, recently we’ve seen fluctuations in the number of customers taking on a mortgage for debt consolidation. It’s not unexpected, many for example want to consolidate their debt and make it more manageable after the festive period. That’s become even more prevalent with the ongoing cost of living crisis.
“What is encouraging to see is that the 50+ mortgage product is making a difference for so many reasons – allowing customers to fund a variety of improvements to their lives, whether that be a reduction in monthly outgoings, a new home or helping out loved ones, at this economically difficult time.”