Rumbold

Rumbold

Can any one give us some advice on how we solve this situation.
We took out a Mortgage two years ago on a property worth 280,000 with a mortgage of 200,000 our repayment at present is interest only, the problem is that we are both in our 60, although we have a confirmed income of 30.000 per annum, we have learnt that there is an age related policy which states that when we reach a certain age our total mortgage becomes due, although we can aford the repayments we are in no position to find the total balance to secure the property, even though we can continue to pay the monthly mortgage . are there any solutions that will give us peace of mind.

CloudCuckooLand

How is your "alternative repayment vehicle" performing?

What age does it become due?

For complete peace of mind, sell and downsize to something around £80k in value...

For some, but not total, peace of mind sell, downsize to a mortgage you can afford the repayments of, with the "certain" age in mind...

Were you planning to be in a position to find the total balance two years ago? Was there a plan to find it? How has that plan altered?

If there was no plan, why did you buy it?

dunstonh

we have learnt that there is an age related policy which states that when we reach a certain age our total mortgage becomes due

There is no such policy.

Providers can set an age limit but that is agreed at the outset. They wont change that for existing borrowers. So, if you borrowed £200,000 over 25 years and the 25 years ends when you are 72 then either your mortgage will be cleared when you are 72 (if repayment mortgage) or you will be asked to repay the mortgage at 72 (from your endowment, pension lump sum, S&S ISAs or other investments you have if interest only).

So, in your case, the mortgage you took at two years ago will end when the term your chose ends.

As long as you are on a repayment mortgage or an interest only mortgage with a repayment vehicle in place then you are fine. If you are on interest only with no repayment vehicle then you have problems. Although nothing that selling the house and going into rented or moving to a cheaper area and buying a small terraced house would not solve.