The latest mortgage data has revealed that, between 2019 and 2021, there was a 30% increase in the number of mortgage customers over 50 who spent their loan funds giving financial family gifts.
Customers using the mortgage for debt consolidation has also increased by 15% during the same period. In fact, between 2020 and 2021, 27% of mortgagors stated they were using the capital for debt consolidation.
Emma Graham, business development director at Hodge, said:
“It has been a bumper few years for our 50+ product, with a 59% increase in completions from 2019 to 2021.
When our intermediary partners and clients apply for the 50+ mortgage we ask them what they are planning to use the funds for, so we can assess the application as flexibly as possible. This data gives us a great insight into what our customers need the mortgage for.
And it shows that our 50+ product is proving popular for those in later life who want to either get their finances in order, or help family out – which is understandable given the last two years of uncertainty we have all been facing.”
The data also found that customers looking to consolidate debts with the funds had a higher average loan size at £161,886, while those who were using the 50+ mortgage funds for home improvements had an average loan size of £154,263, and for a family gift, the average was £146,269.
This comes as interest rates were increased to 0.75% by the Bank of England in March, with mortgage rates also creeping up. Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said at the time:
“Our mortgages are protected to a large extent by the fact that most of us are on fixed rate deals. New borrowers have also been sheltered from the full impact of the rate rise, because the high street banks are still sitting on such a cushion of cash that they can afford to offer exceptionally cheap deals. However, new rates are starting to creep up, and in February, Moneyfacts put the average two-year deal at 2.44% – up from 2.38% in January but down from a year earlier.”