Can't pay off mortgage, don't want to move.

zag2me

what your forgetting is the fact you have 7 years to do something about it. Incomes will go up in that time and you should be able to pay off some of the mortgage each month, this can be done with regular overpayments.

alfiesmum

How much is it you need to save in 7 years?

hugheskevi

It sounds like a home reversion plan might be suitable for you.

Have a read of the case study here and have a good read through the SHIP site.

There have been a lot of bad stories about this sort of thing, so do be extremely careful.

baggieaggie

Thanks for the replies, but no, due to circumstances beyond our control, there is absolutely no way whatsover that this mortgage can be paid off in 7 years. Which I thought I'd made clear! And I'm surprised that anyone would advise chucking money at the lender to do so - if we had it, that's the last thing we would do! Any surplus cash would go into ISAs (cash and/or Unit Trusts).

Since posting, we've discovered that many Councils (strapped for housing stock) are considering buy-leaseback schemes. If our Council is one of them, that's what we'll do.

Raggs_2

baggieaggie wrote: »

Thanks for the replies, but no, due to circumstances beyond our control, there is absolutely no way whatsover that this mortgage can be paid off in 7 years. Which I thought I'd made clear! And I'm surprised that anyone would advise chucking money at the lender to do so - if we had it, that's the last thing we would do! Any surplus cash would go into ISAs (cash and/or Unit Trusts).

Since posting, we've discovered that many Councils (strapped for housing stock) are considering buy-leaseback schemes. If our Council is one of them, that's what we'll do.

People would suggest throwing money at the lender because there's a reasonable chance that the interest rate on your mortgage is higher than what you can pull back in your savings.

And also because you clearly state you want to stay in the home. And the best way to do this, is pay off the mortgage, which you need to "throw" money at the lender for. And the earlier you start throwing, the larger savings you make (and in theory, get a good some of it back through having equity).

somethingcorporate

baggieaggie wrote: »

We put down a good deposit and the house has gone up in value, so equity is about £40,000 at present, and should be a lot more in 2017 when the mortgage term ends.

When did you buy the house? what makes you think that you'll have more equity in 2017 if you are not reducing the mortgage?

Chances are it is worth less than you assume, check local sales for current actual values.

Batchy

sorry to sound negative but if you have struggled to make this house repayment have you been making any provision for pension on retirement? as a state pension will probably only just about cover costs of food and heating on your retirement.

If you expecting to extend mortgage based on state pension, then you may be disappointed. it might be the right time to downsize, and repay the new mortgage over the next 7 years, with a 40k deposit, it might be the right time to do it, so you don't have to do it on your retirement.

Even if the value of the house does go up, so too will the value of other properties too, so the cost to move will basically be the same as a result, you need to impact this cost by either paying off capital or Saving, and putting in a high interest account if you can't pay off the capital early.

You might be better off taking your 40k equity on retirement and going to spain or poland and buying a very cheap apartment/ small house. It might be the only way to avoid renting, as with 40k capital the department for housing will laugh at your claim for subsidised housing, or housing benefit unfortunately, until you have about 10k left unfortunately. But you need to clarify these details with appropriate authorities.

I commend you for asking the question on this forum, its never too late to do something about it!

good luck, all the best.