A freedom of information (FoI) request from former pensions minister, Steve Webb, has revealed a significant increase in the proportion of home loans arranged to last into retirement, with the figure jumping from 31% in Q4 2021 to 42% in Q4 2024.
According to new research from Eligible, the growth of ultra-long mortgage deals stems from unprecedented rises in both house prices and fixed-term mortgage products over the past two years, with the average house price sitting at £282,000.
As the number of Brits “gambling” with their retirement prospects is set to increase, exclusive data from Eligible has revealed that one in 10 mortgage customers don’t understand the terms of their product.
According to Zahra Hassan, co-founder of Eligible, the rising costs associated with the pursuit of home-ownership ought to encourage Brits to engage regularly with suitable product offerings and their own financial situation.
Despite this, Eligible’s own data founds that almost one in three banking customers haven’t checked their credit score once in the past five years.
All the while, 11% of Brits have encountered permanent implications to their borrowing and spending activities due to a lack of awareness of their own financial situation.
Zahra Hassan, co-founder of Eligible, said: “The fundamental problem is that mortgages are a financial product that customers take out only once every three to five years.
“This means that they aren’t regularly engaging with their mortgage and aren’t in the loop of what all their options are.
“In a broader sense, rising interest rates, coupled with increased energy and living costs, heighten vulnerability to default.
“However, the key factor that pushes someone from financial strain to actual default is their lack of awareness about the array of options that their bank could have offered to temporarily ease their financial burden, particularly on their largest financial obligation – their mortgage.”
Hassan added: “What’s needed – and what we’re doing at Eligible – is an active two-way dialogue, and AI-powered systems like Eligible facilitate this by initiating interactions with customers and monitoring their responses to gather insights.
“For instance, we proactively send educational content to customers to assess their anxiety levels and their understanding of their current financial products.
“Based on this information, we can fine-tune our approach by crafting more personalised educational content and adjusting our tone to be softer, supportive, and empathetic. This way, borrowers can better appreciate that lenders are here to assist them.”