Late life lending is no longer part of the market. It is being reshaped by massive changes driven by a combination of demographics, economic and behavioral movements.
People are living longer, retiring later and continuing to take out mortgages into later life, while rising housing prices mean that housing wealth is playing a more important role in how people fund retirement, support their families and manage financial stability.
Recent evolution requires cooperation, but also leadership
The Financial Conduct Authority’s Later Life Mortgages Market Study, launched in March, is a clear indication of the growing importance of this space. As lending increasingly moves into retirement, the sector must evolve to meet the complex and interconnected needs of consumers. This is an opportunity to step back, assess how well the market is working and, importantly, define what ‘good’ will look like in the future.
The pressures driving the environment are significant and we are asking our housing stock more than ever. Research by Fairer Finance shows that, by 2040, more than half of households over the age of 60 are expected to rely on home equity to support their standard of living in retirement. This reflects a broader change in the way property is viewed: not just as a place to live but as a primary financial asset.
Structural change
Many borrowers are already extending their mortgage term later in life. Affordability pressures in recent years have accelerated this trend, with 68% of first-time buyers, typically in their mid-30s, taking out mortgages for 30 years or more, and 45% choosing 35 years or more.
For many, this is a structural change, with a growing number of borrowers carrying mortgages into retirement and beyond.
If we get this right, we will create a marketplace that truly works for buyers and advisors
At the same time, international support plays a very important role. The ‘Bank of Mum and Dad’ provides almost £10bn a year, supporting more than 170,000 first-time buyers and a fifth of second-time buyers.
Taken together, these trends point to a fundamentally changing market; where the normal parameters of the asset life cycle no longer apply. The traditional mortgage journey is being replaced by something more fluid, where borrowing, repayment, financial planning and, most importantly, counseling extend throughout the customer’s life.
Advice is important, no matter how sophisticated digital tools become. Late life lending is not about choosing a product; it’s about understanding the customer’s broader context, priorities and long-term needs.
The perfect way
It is encouraging that we are seeing progress.
Many advisers are increasingly realizing that late lending requires a comprehensive approach, supported by frameworks, referral mechanisms and professional collaboration where appropriate. But this is not consistent across the market, and wider adoption is needed.
Many borrowers are already extending their mortgage term later in life
One of the challenges we have to face is how we define ‘perfect advice’. It’s not about being an expert in every product area but about having a solid understanding of the range of options, knowing when to advise and when to defer, and ensuring that the client’s current and future needs are properly considered.
Investment in technology and supporting infrastructure will be important. Although effective tools exist, comparing conventional loans, RIOs and lifetime mortgages within a single platform remains complex.
We also need to know that questions about value, payment and sustainability of trade remain part of this debate. These are not always easy conversations, but they are essential if we are to deliver good results for consumers and a sustainable future for advice.
The evolution of the modern lending industry requires cooperation, but it also requires leadership. The industry already has many answers, and success will depend on how effectively we integrate them.
Real estate wealth plays an important role in how an individual funds their retirement, supports their families and manages financial stability.
If we get this right, we will create a marketplace that truly works for buyers and advisors. One where advisors can work confidently across the wider ecosystem; when consumers understand their options clearly and honestly; where product development is accelerated with solutions that are compatible with the entire life cycle; and where creativity supports, rather than complicates, the advice process.
This is where we must focus.
Stephanie Charman is chief executive of the Association of Mortgage Intermediaries
This article appeared in the May 2026 issue of Mortgage Strategy.
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