Older borrowers are taking out a record number of mortgages, with nearly £2 billion borrowed in the last year. But is this a good idea?

New figures show that more and more people over the age of 70 are taking out mortgages, with a record £2 billion borrowed in the year to April. This is partly down to older homeowners wanting to help their children and grandchildren get on the property ladder, according to experts at TWM Solicitors.

So how does it work? Older borrowers can take out a mortgage against their home and then gift the cash to their younger relatives. This can give them a much-needed boost to get on the property ladder. And, as an added bonus, if the borrower lives for seven years after making the gift, the money is inheritance tax free.

Another reason for the rise in older borrowers is the soaring cost of living. With prices going through the roof, some older people are choosing to release cash from their homes to help cover their expenses.

But taking on a mortgage later in life is not without its risks. It’s vital to make sure you can afford the monthly repayments after you retire. And, with interest rates on the rise, borrowers need to be prepared for their monthly payments to increase.

If you’re thinking of taking out a mortgage later in life, it’s crucial to get expert financial advice to make sure it’s the right decision for you. You need to weigh up all the costs involved, including interest and commission, and be certain it’s the best solution for the long term.

A spokesperson for TWM Solicitors said: “For those looking to help the generation below, there may be merit in considering taking out a mortgage later in life. However, careful planning is essential to ensure the numbers work for you.”