Over 50s told to do one thing if they want to be mortgage free before retirement | Personal Finance | Finance

Homeowners over 50 are being urged to do one thing if they hope to pay off their mortgage before retirement. Experts believe that with around 1.6 million homeowners in the UK coming off a cheap fixed-rate mortgage deal this year, there is an opportunity for those in their 50s considering a new deal, if they plan ahead.

With a recent reduction in interest rates set by the Bank of England and a rise in inflation over the last 12 months, there is plenty to consider when looking for a new deal. Holly Tomlinson, financial planner at Quilter, recommends securing a rate as soon as possible if you’re coming to the end of a fixed deal. She said: “You can typically lock in a new deal up to six months before your current deal ends and can change to a better rate if one becomes available in the meantime.”

Ms Tomlinson believes that many people in their 50s are looking to clear their mortgage before they reach retirement age, but that is not the case for everybody.

In recent years, the number of over-50s who have had to extend their deals beyond retirement has skyrocketed, according to Ms Tomlinson.

Those looking to pay off their mortgage sooner could look to overpay if they are in a position to do so. However, it’s important to check the terms for overpayments in any new deals if remortgaging.

Tolerance of overpaying varies between providers, with some allowing homeowners to pay off as much as they are able or want to, whilst others cap the amount at around 10% of the outstanding amount. Check with your lender what your terms are before making any changes.

Richard Dana, CEO of mortgage broker Tembo said: “With so much uncertainty around rates and potential changes from the budget, it’s really important to seek professional advice when it comes to your remortgaging options, especially as there are some really great deals available at the moment, but rates are changing daily.

“To prepare for that, make sure you have your income details ready, and it’s also useful to have a good idea of your property value, because if you do end up changing lender as part of your remortgage they’ll need to undertake a new valuation.”