Older homeowners face raiding savings to pay mortgage In 2004 just 2pc of people over the age of 65 had a mortgage, with a mean outstanding balance of £17,000. By 2012, this proportion had risen to 11pc, with a mean outstanding balance of £62,000. This, we suspect, is a by-product of the 'Bank of Mum and Dad,"" Fathom said. Moody's estimated that the average outstanding mortgage balance for older borrowers on interest-only deals was even higher - at £70,227, and the average deposit for older interest-only borrowers whose mortgage is due for repayment by 2016 was 46pc. It also warned that an early rise in interest rates or rapid energy bill or other price rises would hit older borrowers hard, leading to "an increase in defaults" as their incomes are "often hard hit by high inflation." Older borrowers are particularly at risk because most mortgages in the UK are 20 or 25-year loans, and at the end of the loan period the debt must be repaid. Younger borrowers will have much longer left on their loan. Interest-only mortgages were hugely popular before the crisis because the payments were lower, but they are frowned upon by regulators now unless the borrower can demonstrate how the principle will be repaid. In January, Fitch, another ratings agency, warned that around £120bn of interest only debt was due for repayment by 2020 and that the "default probability" was 40pc higher than for repayment products. Moody's research was based on analysis of £86bn of securitised mortgage debt held by 1.23m borrowers. According to the Council for Mortgage Lenders, there are 11.2m mortgages in the UK with debts totalling £1.2 trillion. Extrapolating from the Moody's data, some 1.4m borrowers are over 60 with mortgage debts of £100bn. Some 260,000 are on interest-only deals worth £28.3bn that mature by 2016. Of those, 52,000 have deposits of less than 20pc and mortgage debt of £5.7bn.