Value of new later life mortgage loans jumped by a fifth in last quarter of 2025

The value of new mortgage lending to older borrowers jumped by around a fifth annually in the fourth quarter of last year, according to figures from a banking and finance industry body.

UK Finance, whose report looked at mortgages taken out by borrowers over the age of 55, said 41,100 new loans were advanced to older borrowers in the fourth quarter of 2025, marking a 15.1% annual increase.

The value of this lending was £6.8 billion – a 20.5% increase compared with the same quarter a year previously.

UK Finance said that residential later life loans in the fourth quarter of 2025 made up 8.02% of all residential loans. Buy-to-let (BTL) later life loans in the fourth quarter represented 21.4% of all BTL loans.

Clare Stinton, financial wellbeing lead at Hargreaves Lansdown, said: “Retirement was meant to be the light at the end of the tunnel. Instead, for a growing number of over-55s, it’s coming with a mortgage attached.”

She added: “Borrowing in later life is becoming part of the mainstream retirement picture, but this shift comes with real consequences.

“Once the pay cheques stop, retirees are typically relying on a finite pot of cash to last the rest of their lives – covering everything from essential costs, to hobbies, holidays and dinners out with loved ones.

“Adding a mortgage to the bill – particularly at today’s higher interest rates – can add significant strain to a budget that may already be stretched by rising living costs.”

Ms Stinton said: “The earlier and more consistently you invest in your pension, the greater your options will be when the paydays stop.”