A third of mortgage holders say they will have paid off their mortgage by the time they hit 65, data from LV= shows.  

The financial services group says 32% of homeowners with a home loan did not think they would hit this target, according to its Wealth and Wellbeing Research Programme study.  

It says that one in ten retirees found they still had mortgage debt when they retired, averaging £38,000.  

The firm adds that 63% of those who retired with an outstanding mortgage debt had to pay the mortgage debt with their pension, giving rise to fears of homeowners stuck on forever mortgages.  

It adds that as “mortgage costs have soared due to rising rates” more homeowners are considering lifetime loans to manage costs.  

The survey found 28% of homeowners would consider a lifetime mortgage, with 3% adding that they already have an equity release loan.  

It adds that 31% of those who would consider a lifetime mortgage said that they would be more likely to because of the current economic conditions.   

This rises to 45% for those with a household income of £100,000 or more.  

Key features about equity release that homeowners found reassuring were its downsize protection, among 33% of those surveyed, the ability to transfer the lifetime mortgage to another property if you moved home, 32%, the lifetime mortgage being provided by a well-known financial services brand, 29%, and fixed early repayment charges, 25%.  

LV= director of savings and retirement David Stevens says: “Our latest quarterly survey shows that 300,000 mortgage holders have fallen behind on payments in the past three months.   

“Many people are on fixed-term mortgages ending in the next 12 months. That means millions of people face even higher mortgage payments when they come to re-mortgage or switch to a variable rate.  

“Retirees are also faced with difficult choices. For example, they may turn to drawing down money from their pension at a higher rate that may be unsustainable for them in the long run and increase the risk of running out of money.   

“One option is to use equity release to unlock the value from their home to potentially pay down mortgage debt.   

“Our research reveals that those considering equity release are increasingly pragmatic about the option of accessing equity from their home as a way to help them achieve a more confident later lifestyle.”  

The LV= Wealth and Wellbeing Research Programme is a long-term quarterly survey of 4,000 UK adults.