The pensioner, from East Sussex, is believed to be the oldest person in the UK to be granted a mortgage. The revelation was greeted with alarm by debt advisors.

He faces repayments of £958 a month on the interest-only loan and intends to pay them from…

The man, who has not been named, is one of thousands of pensioners, including many in their seventies and eighties, now borrowing huge sums of money to buy property.

Most lenders will now give mortgages to over-65s who fulfil the lending criteria but impose an age limit of 75. A handful, however – Bristol & West, Woolwich, Preferred and Mortgage Trust – have no age limit. "It’s a new phenomenon," said Jonathan Moore, of Kent-based Mortgages for Business, the broker that arranged the loan for the 102-year-old and has given mortgages to hundreds of pensioners.

"Even five years ago anybody over 65 would have been hard-pushed to get any kind of mortgage. But lenders have eased their restrictions to keep in step with the market."

Pensioners’ charities warned that the trend for giving 25-year mortgages to over-65s could lead to debt problems that would cause stress and damage the borrowers’ health.

Gordon Lishman, the director-general of Age Concern, said: "It’s crucial that people think through the long-term implications of taking out a mortgage in or near retirement. Changes in circumstances, such as retirement, illness and disability, divorce and bereavement can all -contribute to debt problems in later life.

"Anyone who is considering taking out a mortgage in later life should fully explore the other options, speak to an independent financial adviser, and contact their local Age Concern to ensure they are not missing out on any money benefits."

A spokesman for the Citizen’s Advice Bureau said: "Taking out huge loans later in life can lead to serious problems. Borrowers must be extremely cautious and lenders must not be irresponsible or the consequences could be horrendous."

The Council of Mortgage Lenders said it had relaxed its lending criteria because many pensioners were able to afford the repayments through rental or other income.

Mr Moore said: "Many over-65s take out mortgages to invest in buy-to-let because the pensions crisis has left them with insufficient income. Obviously there is an element of risk if property prices and rental income suddenly fall but there is no sign of that at the moment."

He said many pensioners took out loans and invested in partnership with their children who would take on or sell the properties when their parents died.

Richard Shone, 75, from north London, has taken out a 25-year interest-only mortgage of £120,000 – due to be paid off when he reaches 100 – to buy property in his area.

He and his wife, Janet, 73, plan to add the property to their portfolio of 10 "buy-to-let" homes which they have built up since they retired.

Mr Shone, a retired maths teacher, insists he does not lie awake at night worrying about his loans, which total hundreds of thousands of pounds.

"It’s like playing Monopoly, but with real houses," he said. "It can be quite stressful. But I enjoy it."

There are also tax advantages. Many pensioners will remortgage to give money to their children or grandchildren. This will also lower the value of the estate and perhaps put it below the threshold for inheritance tax which was raised to £350,000 from 2010 in last week’s Budget.

Via Sunday Telegraph