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One in five people expect to pay mortgage in retirement, survey finds

Study by Royal London Ireland indicates almost a third do not expect to own a home outright by the time they retire

Study indicates that more women than men expect they will not be free of their mortgage by the time they retire
Study indicates that more women than men expect they will not be free of their mortgage by the time they retire
Eoin Burke-Kennedy
Wed Dec 11 2024 - 05:00

One in five Irish people expect to still be paying off their mortgage in retirement. That’s according to a survey by Royal London Ireland, the Irish subsidiary of pensions and life insurance group Royal London, which examined people’s expectations about owning a home by the time they reach the State retirement age of 66.

The study indicated almost a third (35 per cent) of people in Ireland did not expect to own a home “outright” by the time they retire, while more than a fifth (21 per cent) expected they would still be paying off their mortgage in retirement.

More women than men (23 per cent versus 18 per cent) expect they will not be free of their mortgage by the time they retire. Around 14 per cent of respondents said they did not expect to own a home or be paying a mortgage on one when they retire.

Conversely, two-thirds (65 per cent) of adults believe they will own their own home in retirement.

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The survey’s findings come amid a significant fall-off in home ownership rates in Ireland, particularly among people of a prime working age. Research by the Economic and Social Research Institute (ESRI) shows the share of 25- to 34-year-olds who own their own home more than halved between 2004 and 2019, falling from 60 per cent to just 27 per cent

The Royal London Ireland survey indicated that those over 55 were the most confident about their ability to own their own home by the time they retire, with 80 per cent of this age cohort feeling this way. This compared to just over half (52 per cent) of those aged 18-24 and fewer than six in 10 (57 per cent) of those aged between 25 and 44.

“The age at which first-time buyers get on the property ladder continues to creep ever higher,” said Daragh Feely, sales director at Royal London Ireland.

“The number of first-time buyer borrowers aged over 35 increased to 44 per cent last year – from 36 per cent in 2019 and only 17 per cent in 2004,” he said, noting the median age of first-time buyers is now 34.

[ Who is buying a home in Ireland today? The changing profile of first-time buyers ]

“The measures announced in Budget 2025 – such as the extension of the Help-to-Buy scheme and mortgage interest relief – will hopefully help first-time buyers to get on to the property ladder earlier and manage the mortgages they take on,” he said.

“However, if the trend of buying homes later in life continues, this is likely to put more pressure on some mortgage holders, as they have less time to pay off their home loans,” he said.

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Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times