People using funds from their 50+ mortgage for debt consolidation
By Hodge Bank
Our Hodge inhouse data found that the number of people using funds from their 50+ mortgage for debt consolidation has doubled. Between January and July in 2023, 14% of customers told us the purpose of the mortgage would be for some form of debt consolidation, up from 7% over the same period the previous year.
In correlation, the office of national statistics (ONS) reported that one in five homeowners with a mortgage have borrowed money for debt consolidation. And some people are turning towards the equity in their homes to support them.
As the UK struggles with the current economic climate, we see tightening of purse strings and savings being dipped into. This can mean repaying debt can be more difficult for consumers. In addition, the rising cost of interest rates is making debt, such as credit cards and loans, more expensive. To ease the strain, it seems customers are actively seeking alternatives such as debt consolidation linked into their mortgage.
Emma Graham, business development director at Hodge, said: “I love delving into this data every few months as I think it really gives us an idea of what our customers are doing and how they are faring financially.
“The fact that more are using it for debt consolidation is not surprising, as it shows that many have a lot of debt they need to pay off in light of the current economic headwinds we’re facing. But it shows that people are doing so using a financial mechanism that will hopefully help them gain control of their finances once and for all.”
Our data also found that the number of customers using the funds for home improvements has dropped. In 2022, 14% said they had used the money to do up their home, compared with just 9% to July 2023.
The other reasons for taking out a 50+ mortgage product remained pretty static from 2022 to July 2023 otherwise, with many using the funds to offer a financial family gift, a home lease extension or to purchase another property.
Emma added: “As the uses for the mortgage fluctuate every year, I believe what this data shows us is that our 50+ product is flexing to help our later life achieve what they want and need at this time of their life. Whether that be an extension to their home or sorting out their finances, which for those of us who work hard to develop, design and constantly improve these products, is great to see.”
Find out more
Our 50+ mortgages consider earned income of both employed and self-employed customers and have no upper age limit if the mortgage is affordable on a pension income. Hodge also lends up to six times a client’s income on a like for like remortgage.
We also offer an annual 10% overpayment facility across our entire range, as well as our Early Repayment Promise - where customers can sell up and repay in full without early repayment charges.
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