This represents a 7% decrease in mortgage volumes compared with Q2 2021, but a 6% increase compared with volumes a year earlier.
There were 44,130 new later life mortgages in Q3 2021, with total lending reaching £6.46bn in the quarter, according to the UK Finance Later Life Mortgage Lending Q3 2021 data.
This represents a 7% decrease in mortgage volumes compared with Q2 2021, but a 6% increase compared with a year earlier.
The data showed that the overall quarterly reduction was a result of declines in the number of mortgages taken out by those aged between 55 and 69.
UK Finance said this reflects lower house purchase volumes in the wider housing market, coinciding with the unwinding of the stamp duty holiday.
Lending to older borrowers - aged over 70 - was stable, as UK Finance noted these borrowers access the market primarily through products that are not related to house purchase, such as equity release.
Retirement interest-only (RIO) mortgage volumes were low compared to other later life products, likely due in part to challenges for many borrowers in meeting the affordability requirements.
Lifetime mortgage volumes remained modestly lower than prior to the COVID-19 pandemic, but UK Finance expects this reduction to be temporary as the uncertainty driven by the pandemic subsides.
Charles Roe, director of mortgages at UK Finance, said: “Following the end of the stamp duty holiday, mortgage lending to over 55s declined seven per cent in Q3 compared to the previous quarter, mirroring the wider market.
"However, there was a slight rise in lending to those aged over 70 as people sought to release equity in their property rather than moving home.
“Our focus on retirement interest-only (RIO) mortgages shows they have grown in popularity since their launch in 2018.
"These products provide a good alternative for customers where a lifetime mortgage may not be the best fit, however, take up is lower than other later life products due to affordability.”