Over-50s homeowners hardest hit by mortgage crisis

Homeowners in their fifties and sixties are falling into mortgage arrears more often than younger borrowers, data has shown.

Half of homeowners currently behind on their mortgage payments by two months or more are over the age of 50, according to data revealed in a Freedom of Information request.

They make up 58,810 of all 115,568 late payers, and those aged 61 to 65 are the worst hit of any age group – making up the highest proportion of borrowers in arrears.

The figures, obtained by mortgage lender MPowered, are based on the Financial Conduct Authority’s most recent arrears data which spans April to June of this year.

Stuart Cheetham, chief executive of MPowered, said older borrowers are now facing “significant financial pressure” – particularly those nearing or in retirement.

He added: “It’s clear that a combination of higher mortgage rates and the exorbitant cost of living is taking a heavy toll.

“The fact that the highest percentage of borrowers in arrears is among 61-65 year-olds underscores the challenges faced by those whose incomes are decreasing just as their mortgage rates are increasing.

“Older borrowers often have less consistent earnings, relying more on pension income which makes them more vulnerable to falling behind on their mortgage payments.”

The Bank Rate is currently 5pc, having risen considerably from its pandemic-era low of 0.1pc to combat spiralling inflation – which peaked at 11.1pc in October 2022.

After the Bank Rate cut last month, from 5.25pc to 5pc, mortgage rates started to fall more rapidly.

But the average two-year fix is still 5.47pc, and the average five-year fix is 5.14pc, according to data firm Moneyfacts.

Some older borrowers are also “mortgage prisoners” – homeowners who took out loans before the financial crash and who are now stuck on very high standard variable rates. Some say they are paying as much as 9pc in interest.

Unlike younger borrowers, older homeowners rely on state pension payments – but they have been shown to be falling short of pensioners’ basic needs.

Even after an expected pay rise in April, the Joseph Rowntree Foundation think tank has said there will be a £5,200 gap between what pensioners will get (£12,000 a year) and what they need (£17,200 a year) to cover all their bills and essential spending.

This comes just as Labour strips 10 million pensioners of their winter fuel payments, worth up to £300 a year.