Thousands of people face being caught in a “mortgage for life” trap where they must still pay off their home loan after retirement.
Surging house prices mean families are taking longer to get on to the property ladder, and older people are having their finances drained to help sons and daughters put a house deposit together.
Just 56pc of people expect to be mortgage-free when they stop working for good, research commissioned by pensions provider Friends First has found.
Some of those who expect to be in mortgage debt in their late 60s are renting at the moment, while others expect to be repaying a mortgage for up to five years of retirement.
Bank of Ireland and Permanent TSB will sanction mortgages that can be repaid up to the age of 70 for PAYE workers.
But the failure to clear debts before retiring is partially down to people taking out bumper mortgages during the housing bubble years and then finding themselves unable to service their debts during the last 10 years of austerity, experts said.
UK watchdog the Financial Conduct Authority yesterday said the mortgage debts of over-65s are set to double from £20.1bn (€22.8bn) to £39.9bn (€45.3bn) by 2030.
It warned as incomes tend to fall into retirement, those in debt may struggle to service their loans, and will need to sell their homes or work beyond the State retirement age.
Irish mortgage expert Michael Dowling said it was not surprising around half of people here expect to still be in debt at retirement. He said in Ireland, many buyers had taken out 30-year mortgages during the boom, with some even taking 35-year loans.
“Given the terms of the mortgages people have, and are taking, it is not surprising so many will not be debt-free at retirement,” said Mr Dowling.
“This will create its own problems as half of workers have no pension. People in debt in retirement will compound the pensions crisis we have.”
Mr Dowling said people would struggle to repay mortgages in retirement, especially if they only have the State pension.
The stark finding comes as separate figures show new home buyers need massive deposits to secure a mortgage.
Rising deposit levels reflect the surge in house prices. Dublin buyers now need a deposit of €57,000 to secure a mortgage.
This is up almost €6,000 on last year.
Nationwide, the average is €34,000 for new buyers, according to figures from the Banking and Payments Federation of Ireland.
Financial experts said the sheer size of the down-payments now needed by new buyers indicates many new mortgage holders have to get help from their parents to get the funds together.
Central Bank rules require first-time buyers to have a deposit of at least 10pc of the value of property they are buying.
They cannot borrow any more than three-and-a-half times their salary. Commuter towns and villages around Dublin have the second highest deposit levels. First-time buyers have an average deposit of €32,000 in the commuter areas around the capital, with movers having a €77,000 deposit.
Connacht/Ulster had the lowest deposit level, at around €20,000, according to the Banking and Payments Federation.
“It highlights that for quite a number of people buying a house is out of their reach unless they have access to the bank of mum and dad,” said Mr Dowling.
The figures show the average first-time buyer has an income of €65,000. In Dublin, the average income is €77,000.