Equity release loans 'being used for pensioners' mortgages'

23/04/2009

Hard-up pensioners are taking out additional credit against their home as they struggle to keep up with their mortgage payments.

New statistics have been made public by Key Retirement Solutions, showing that equity release is becoming popular among retirees who have mortgage debts.

Equity release is a type of loan that is borrowed against the value of a property that has already been paid off by its owner.

Key Retirement Solutions said that 39 per cent more pensioners took out equity release to help them with their mortgages in 2008, than did so in 2007.

Over-70s who took the loans were found to be in the deepest trouble, owing an average of over £48,000 on their mortgage.

Group director at Key Retirement Solutions Dean Mirfin commented: "Today's and tomorrow's pensioners face a retirement in a position of debt which they had maybe not anticipated.

"It does not therefore come as a surprise that many of those faced with this scenario are looking to equity release as a solution to eradicate their mortgage debt to free up much needed income to further enhance their retirement years."

Tags; Housing Debt and Bills, Retirement Money Problems,

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