Later life mortgages increased by 33.5% in Q1

UK Finance has published its later life mortgage lending update for Q1 2025 which showed that there were 38,510 new loans advanced to older borrowers in Quarter 1 (Q1), increased 33.5 per cent year on year.

The value of this lending was £6.1 billion, which was up 42.6 per cent compared with the same quarter a year previously.

There were 5,620 new lifetime mortgages advanced in Q1, up 11.1 per cent year on year. The value of this lending was £530 million, which was up 39.5 per cent compared with the same quarter a year previously.

There were 339 retirement interest only mortgages advanced in Q1, up 19.4 per cent year on year. The value of this lending was £33 million, which was up 17.9 per cent per cent compared with the same quarter a year previously.

Residential Later Life loans in Q1 represent 7.6 per cent of all residential loans. BTL Later Life loans in Q1 represent 21.5 per cent of all BTL loans.

Helen Morrissey, Head of retirement analysis at Hargreaves Lansdown said “Later life mortgage lending boomed over the past year, casting a significant shadow over our retirement planning. Having to find the money to pay housing costs in retirement can put real pressure on a budget that may already be under severe strain.

“Over the long term, we can expect these figures to keep increasing. Rising house prices mean people are getting onto the property ladder later and taking longer mortgages, so even if everything in life goes to plan, they will be paying their mortgage beyond the age of 55. Some will be able to work later and use the extra cash to meet these outgoings, some will have windfalls during their working life to help pay off lump sums, but others face difficult retirement spending choices.

“The most recent data from the HL Savings and Resilience Barometer shows only 36% of households are on track for a moderate retirement income. This puts the cost of a moderate retirement for a single person at £26,129 per year and a comfortable retirement at £41,829. This is already a stretching target to reach, but these figures don’t include rental or mortgage costs. This means the reality of a good retirement income could be even more remote for many people.”