Lenders are selling mortgages to thousands of “want it all” pensioners who are prepared to die in debt to fund expensive holidays and home improvements.

There are concerns that many pensioners who take out a home loan or remortage their property to raise cash are finding it hard to keep up repayments and run the risk of losing their homes.

A survey conducted by The Times of the top 30 mortgage lenders in Britain found that 26 offered repayment or interest-only loans to the over-65s.

Some lenders, including Halifax, Nationwide and Northern Rock, do not have an age limit — meaning in theory that someone aged 100 could still be paying off their mortgage.

Consumer groups, including Citizens Advice and National Debtline, said that they had been approached by retired people who had been sold mortgages that they could not afford to repay.

Sarah Miller, a spokeswoman for Citizens Advice, said: “We have seen evidence of retired people being given loans and mortgages when clearly they have struggled to keep up repayments.

“There have also been some cases of people being given loans or mortgages based on their working income when they are about to retire, and their income is about to drop.” While mortgages that last into retirement have become more common as people live longer and buy property later in life, the practice of offering mortgages to those already of pensionable age has gathered pace only over the past few years.

Figures obtained by The Times from the Council of Mortgage Lenders show that more than 18,000 pensioners have taken out home loans or remortgaged in the past 18 months. These statistics do not include equity release plans.

Mortgage brokers say that pensioners want repayment and interest-only mortgages for a number of reasons.

Some elderly people have always rented and decide late in life that they want to own their own home. Others decide to move once they have given up work or wish to pay for home improvements. Some remortgage in order to give money to their children.

Experts have urged borrowers to make sure that they can afford the repayments.

Ray Boulger, senior technical manager at John Charcol, a leading mortgage broker, said: “There can be a big risk if interest rates go up sharply. If someone is on a variable rate then they should make sure that if interest rates went up by 2 to 3 per cent they could still afford the mortgage.”

The Financial Services Authority, the City watchdog, has started an investigation into mortgages in retirement to determine if banks and building societies are lending responsibly. It is due to report in the spring.

A spokesman for Age Concern said: “Older people should be clear that they can afford this commitment both now and in the future — even if their circumstance change.”

Lenders insist that they only take on pensioners who can demonstrate an ability to repay the debt. A spokesman for Abbey, the second-largest lender in Britain, said: “We do lend to pensioners. Like anyone else, they have to prove the loan is affordable in the long term. We have no upper age limit, but if the applicant is going to be over 80 within the mortgage term we restrict the lending to 75 per cent.”

Research from Scottish Widows Bank has found that of the estimated million pensioners with an outstanding mortgage, one in ten owes more than £100,000.

Last month it emerged that one third of lenders are prepared to sell mortgages lasting for 40 years or more.

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