People who are still paying back their mortgages from a pensions fund should talk over their options with their lender, suggests an expert.
Customers who do not research into low interest rates are likely to be paying back more than they should, said Andy Pratt, the chief operating officer at Alexander Hall, a London mortgage company.
This phenomenon can also be attributed to parents helping children to buy their first homes and offering to pay back the mortgages on their kid's behalf.
He added: "With the rates as they are at the moment, somebody may not have actually paid down their mortgage; they may be using that money elsewhere and keeping that debt going because it is a cheaper way to borrow."
Data published by Key Retirement Solutions states that 27 per cent of pensioners are still in the process of paying back their mortgage. The average mortgage owed is estimated to be £45,602.
Another 20.39 per cent of retirees need to pay back loans from their savings that amount to an average £10,447.
The report also found that an estimated £8,967 will have to be paid back from retirement income savings as credit card debt by 20.37 per cent pension holders.
According to the British Bankers' Association, a total of 77,352 mortgages were approved in March this year. While, 34,905 house purchases were approved in the same month. March also saw 24,116 remortgages being approved.
A total of £8.7 billion were sanctioned as mortgages in March this year, which was lower than the £9.2 billion average of the last six months. The figures also reflected a 0.4 per cent drop compared to those in the past year.
Mr Pratt said that people should not be repaying their mortgages from their retirement savings. They should seek advice from financial advisers or the Citizens Advice Bureau.
He stressed: "Essentially they have got to keep the lender involved and eventually agree a position with the lender so that they can move forward on an agreed basis with them about paying back the balance." |
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