"The good news from our research is that the majority of over-55s who have interest-only loans have plans in place to ensure they can pay off the capital"
Research from Homewise found that 10% of the 1.4 million over-55s homeowners who are still paying mortgages have interest-only loans and while the majority are confident of clearing the debt substantial numbers fear they will not be able to.
17% of interest-only borrowers over 55 admit they will be unable to clear the debt. The average amount owed by over-55s with interest-only mortgages is around £91,000 with one in seven owing more than £150,000.
The Council of Mortgage Lenders estimates that at end of 2015 there are around 1.7 million pure interest-only mortgages outstanding with another 500,000 part repayment and part interest-only loans.
However the number of outstanding interest-only loans has dropped significantly from the 3.2 million recorded three years ago.
Mark Neal, Managing Director at Homewise, said: “The mortgage industry has made massive strides in tackling the interest-only issue and has helped borrowers to take action.
“The good news from our research is that the majority of over-55s who have interest-only loans have plans in place to ensure they can pay off the capital but there are still substantial numbers who do not appear to know what they will do."
