What you need to know about retirement mortgages
Whilst much is often made of the plight of first-time buyers, a lot less attention is generally paid to older borrowers who are looking for the right type of mortgage product for their needs.
However, banks and building societies are increasingly aware that borrowers are living longer and want to borrow for longer too. Many are developing new ways to support their borrowers, whatever their age.
For those looking to borrow to fund home improvements, travel the world or help a family member onto the housing ladder, there are now more options available. If you’re an older borrower looking for a mortgage, it makes sense to work with us. We know the market well and can recommend the right deal for your circumstances.
These are loans that are secured against your home that allow you to release some of the equity, the cash value you’ve built up in your home. Lifetime mortgages, also known as equity release mortgages, are available to those aged 55 and over. The mortgage loan and the accumulated interest is paid off when the last surviving owner of the property dies, sells the home or goes into long-term residential care.
Retirement interest-only mortgages
These are similar in many ways to standard interest-only mortgages and let you pay interest on the loan each month. There is no set end-date, and as with a lifetime mortgage, the loan is redeemed when you die, go into care or sell the property. Unlike equity release mortgages, borrowers are required to pass affordability checks and show that they have sufficient income to be able to make regular interest payments for life.
Good advice pays
Those who have a regular secure income may find a retirement interest-only mortgage applicable to their needs. A lifetime mortgage might be more suitable for those who aren’t in receipt of a secure income, or don’t want to make regular mortgage payments for life. As everyone’s circumstances are different, good advice is essential.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
Think carefully before securing other debts against your home. Equity released from your home will be secured against it. Your home may be repossessed if you do not keep up repayments