Francesca Smith, Research Officer, Money and Mental Health
Why getting older doesn’t always mean escaping the burden of mortgage debt when you have a mental health problem
8 August 2024
- Nearly two years after a steep rise in interest rates, and in the broader context of the rising cost of living, many people are still struggling with mortgage payments.
- Our research on mortgages and mental health has shown that those of us with mental health problems can face greater challenges paying off and managing a mortgage.
- Members of our Research Community shared their experience of still paying mortgages, and sometimes of struggling with payments, into later life.
- We’ve made recommendations for firms that would improve the support available to people with mental health problems struggling with mortgage payments – including people in later life.
Taking out a mortgage is a big deal. It’s typically a huge loan that can follow us for much of our life, with some mortgage terms lasting up to 40 years.
As time goes by and we get older, we might take for granted that this burden diminishes. But our research found that for people with mental health problems, that isn’t necessarily the case. Getting older doesn’t always afford the same financial relief from this mortgage burden that those without mental health problems may experience.
The burden of youth
For younger people, being at an earlier stage in their mortgage term can mean the debt burden, and interest payments, are particularly high.
Research from the Institute for Fiscal Studies shows that people in younger age groups will be worst affected by higher interest rates . For mortgage holders aged 20 to 39 years old, the average increase in monthly mortgage payments will be around double that which is facing those over 60 years old.
Shouldn’t things get better with age?
Based on this, we might assume that as we get older we’ll have naturally run down the outstanding balance on our mortgage, and maybe even have some money saved up for a rainy day.
But in reality – and as our research on age, money and mental health has shown –the old adage that things get easier with time doesn’t necessarily ring true for people with mental health problems.
Members of our Research Community shared that their experiences of mental health problems have made it trickier to keep up with mortgage payments and get into a better financial position as they age. This might, for example, be because the symptoms of their condition can make juggling tight budgets and making complex decisions around their mortgage extremely challenging.
“Worrying about my mortgage payments triggered a depressive episode and caused me considerable anxiety and fear. I have had mortgages for over 25 years and have struggled on more than one occasion to pay. My mental health struggles mean I sometimes can’t organise or prioritise or make decisions and that also affects my ability [to keep up with payments].” Expert by experience, age 60-65
We also saw this play out in the data, with two in five (40%) mortgagors with mental health problems saying they feel worried about their ability to keep up with their mortgage payments in light of rising interest rates. That’s compared to a quarter (26%) of mortgagors without mental health problems.
Struggling with mortgage payments long into later life
For many, the challenges of their mental health condition has added to the fact that it can be more difficult to remortgage later in life. Research Community members shared how this made them increasingly worried about being accepted for another affordable deal when the current one ends.
“I think being disabled and over 50 certainly affects the chances of getting a (better rate) mortgage, despite the fact that I’ve had this house for 22 years and never missed a payment.” Expert by experience, age 55-60
Others nearing the end of their mortgage term, with significant debt remaining and little means of paying this off, explained how this ticking time-bomb piles on the pressure and takes a huge toll on their mental health.
“Age [impacts me] – only a year left on our mortgage and lots owed – puts massive pressure on.” Expert by experience, age 70-75
“I will be homeless [when] the mortgage expires in 5 years (the day before my 75th birthday)” Expert by experience, age 70-75
How we can help
People with mental health problems are on the sharp end of rising mortgage costs. But there are also other aspects of our demographic make-up, such as age, that can create further challenges to our ability to keep up with soaring payments.
We’ve recommended solutions that mortgage lenders can implement to support people with mental health problems who are having difficulty keeping up with their mortgage repayments. That includes people struggling with their mortgage debt burden into later life.
You can read more about the research and our policy recommendations in our report No place like home here.
If you would like to understand more about how we can help mortgage lenders to improve support for customers with mental health problems, please contact Rosie at [email protected].