Key Advice said this creates potential problems for any partners and the beneficiaries of their estates, who will have to clear the outstanding mortgage or continue making payments.
The broker warned that bereaved partners could be at risk of repossession if they cannot maintain monthly payments on the outstanding mortgage.
Most mortgage lenders offer grace periods of between three and six months following the death of the mortgage holder, but interest continues to accumulate.
Options for bereaved partners include remortgaging including using a lifetime mortgage or selling the home and downsizing.
Key Advice said the increased use of later life lending options – including lifetime mortgages – earlier in the lending journey, as part of a holistic financial planning strategy rather than a last resort, should be a major focus for advisers in general and mainstream mortgage advisers in particular.
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Chief executive Will Hale wants mainstream mortgage advisers to recognise the innovation that has taken place in the lifetime mortgage sector and ensure that all options are considered when dealing with customers over 50.
He said: “Financial wellbeing is at the core of successful long-term financial planning and particularly important for over-65s with outstanding mortgages.
“Advisers need to continue to engage with older customers, and their families, and consider all options in order to deliver good outcomes in line with Consumer Duty obligations.
“Later life customers should not be worrying about the risk of repossession. But it is a potential risk, as the number of over-65s with mortgages continues to rise.
“They need solutions that enable them to make payments, to continue to manage their cost of borrowing, whilst allowing for flexibility to maintain their standard of living, even when circumstances such as ill health or reduction in income happens unexpectedly.”
