What happens to mortgage at aged 75?

larrym_2

Anyone know the answer to this - have a mortgage running till 75 years - now 69 years old - with major building society. Mortgage outstanding is 45 k - house value 400k (modern 4 bedroom good location). So lots of equity and very small monthly repayment (£100 pr month interest only). Have money to pay off mortgage at 75 BUT if for what ever reason I could not pay mortgage off at 75 years of age. WHAT HAPPENS? Do the building society repossess the house - can they? or if I can still make monthly payments from my pension (45k per annum) quite easily are they likely to extend the mortgage?
Would really appreciate some advice on this as I suspect many people will be in similar postions as they retire.
Thanks
L

Thrugelmir

Age is irrelevant in a contractual sense.

At the end of the mortgage term, in accordance with the terms of the mortgage contract you signed. The capital balance owing will be repayable.

If you are unable to make repayment. Then you will be in default, and your lender will wish to recover the monies owed.

Unlike many other people you appear to have 2 options available. One is to release equity by downsizing your property to clear the debt. The second , with some 72 months left is to repay the capital balance. With a pension income of £45k pa totally achievable.

opinions4u

Potentially they could call you in breach of the T&Cs and pursue repossession.

In reality they wouldn't. They'd offer you some sort of arrangement to start reducing the debt.

A payment of £700ish a month would probably clear the debt in 6 years anyway. Perhaps you should try that.

Crinz

Halifax have a policy where they will extend mrtg by 1 year and change to repayment. I had a customer recently with 90k interest only and no way to repay. the £8k payment was quite funny actually

larrym_2

Thank you people for your replies - appreciated. The age 75 issue is always a problem as who knows where we we all be in 6 years time! Old story, I could pay off the 45k tomorrow but at low interest and less than a £100 per month it is very cheap money Temptation is to 'have a good time' and worry about things when I am 75! 45k invested in ISAS doesn't cover interest repayment but not far off so at moment have 45k facility for next to nothing.

Appreciate that at 75 mortgage contract ends and mortgage provider would want money back - but given that I could still make monthly payments - would they accept this and extend term? Otherwise, I would sell house and trade down to release 45k to pay off mortgage which would be OK as at 75 years would be looking for something smaller. A few of us going to be in this situation In future and just wondering how much pressure mortgage companies would put on me given still good income. Would they really re-posess or just ask me to sell as soon as possible and repay out of proceeds?
Regards,
Larrym

Thrugelmir

larrym wrote: »

. Would they really re-posess or just ask me to sell as soon as possible and repay out of proceeds?

Do you want the hassle? By not repaying the capital balance when its due you will technically be in default. So could incur additional charges thereby negating the benefit of the previous 6 years.

If you want to enjoy yourself. Why not downsize now and make use of the released capital while you are still able to.