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£100bn owed this year: what options are there to help your clients avoid becoming a mortgage prisoner?

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£100bn owed this year: what options are there to help your clients avoid becoming a mortgage prisoner?

Almost £100bn worth of mortgages are set to mature before the end of 2022. That could leave thousands of homeowners with severe financial concerns this year. It’s already expected to be one of the most financially challenging winters in recent memory as the UK continues to battle through the cost-of-living crisis, largely driven by historic levels of inflation and increases in energy prices.

Yet, according to Accord Mortgages, many people are also facing serious mortgage uncertainty as their existing terms end. Whether it’s because interest-only deals have reached maturity, or fixed-rate deals are expiring, mortgage customers face a very different set of challenges to the start of 2022. 

The potential for widespread financial difficulty is significant. Coinciding with the planned energy price cap increase, October sees £26.3bn worth of mortgages either maturing or moving to a different basis. While in December, this increases to over £29bn. The risk this will heap further pressure on thousands of households during an already financially demanding time is real.

Are there any solutions?

The ideal scenario would be to find your client another suitable mortgage or extend their repayment date to a more comfortable time.

However, this year saw the largest single rise in the Bank of England’s base rate for 30 years. And further increases are expected. This, coupled with affordability challenges amidst the cost-of-living crisis, and some mortgage lenders even putting a block on new applications last month, could leave many feeling locked in with no options; arguably a broadening of the mortgage prisoner issue which has been a focus for policy makers and the regulator over recent years.

But there could be a solution.


Selling up and downsizing is an option for some. By using funds generated from the sale of their property, your client can repay their existing mortgage and move to something cheaper. 

But downsizing isn’t always easy. Even if your client is open to leaving their home, they may not have enough equity in their property to repay their mortgage and find a new place that meets their needs within budget.

Equity release

An alternative for someone 55 or over is equity release. By accessing some of the value of their property tax-free, your client may be able to stay in their home, repay their existing mortgage and make the choice whether or not to make monthly repayments.

Equity release also allows your clients to retain full ownership of their property and they can stay in it for as long as they like. There’s even the option to move home in the future with some plans. Of course, equity release isn’t for everyone. Products have been subject to the same rate increases as the mainstream market, thereby increasing the likely cost of borrowing over the lifetime of the loan. As well, it reduces the estate’s value and is a long-term commitment. But it’s certainly something you should consider bringing to your older clients as a potential solution.

Expert advice is crucial

But given the unpredictability of the UK’s financial markets in recent times, and an increase in financial vulnerability, receiving the right advice is paramount for your clients.

Air is the next generation, industry-leading later life lending platform which lives and breathes your growth as an adviser. Enabled by technology, knowledge and people, we offer financial professionals, from advisers to lenders, best-in-class digital sourcing tools, personal development services and incentives; all designed to support and reward your business growth, especially through this challenging time.

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For more information, call our expert adviser support team who are on hand help you with your later life lending questions. Get in touch today on: 0800 294 5097


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