Mortgages for over 70's

paulamy

I am 66 and in full time employment with no leaving age limit.
I earn £24k per annum plus £4k anualy from private pensions plus £7k annual state pension
My wife who is 47 earns £15k pa
I owe 120k on a 160k property and my mortgage expires when I am 70 as my lender does not offer loans beyond that age
This means I will have to sell my property unless I can secure another loan at 70
Are their lenders who will offer mortgaes for people over 70 with a fixed income?
Thanks

kingstreet

Yes. You'll need to see an IFA or Mortgage Broker with Lifetime Mortgage/Equity Release permissions.

As an example, Halifax has a product called Retirement Home Plan, only available with full advice from brokers, not directly from them.

A retirement home plan mortgage is a lifetime mortgage scheme conducted on an interest only basis. No deduction is made in the affordability calculations for the cost of an investment. RHP mortgage is only normally available to applicants over the age of 65. There is discretion for applicants under 65, in circumstances where they are retired with no earned income. Funds can be used for any purposes. Maximum LTV - 75%. Retirement home plan has been classed as a lifetime mortgage scheme by the FSA so is subject to the specific sections of MCOB.

How it works

This is a lifetime mortgage where the mortgage balance never decreases. It must be repaid at the end of the mortgage term or when the property is sold, if this is earlier. Once the mortgage is repaid, any surplus sale proceeds belong to your client or their estate.

To make sure your clients understand the features and risks, you must provide them with a personalised illustration.

Client already has a mortgage?

If your client already has a mortgage with any lender, they can transfer it to Halifax Retirement Home Plan, and take advantage of a lower, interest only, monthly payment.

Monthly repayments

Your clients need enough income to meet their monthly repayments and other associated home ownership costs.

If they haven't already retired, they'll have to continue to pay the monthly repayment once they retire when their monthly income may reduce.

To use retirement home plan for home purchase or home improvements, DWP (Department for Work and Pensions) benefits may be suitable income.

Terms

Minimum age: applicants must normally be age 65 or over
Maximum term: 40 years
Maximum loan: 75% of property value. Other restrictions may apply depending on the product selected
Basis: single or joint life, fixed or variable rate interest only mortgage
Interest rates: rates will depend on the individual circumstances of the applicant

TrickyDicky101

I would presume the disparity in ages between the OP and his spouse may well cause problems if she is on the deeds/Land Registry entry to the property. OP, what provision do you hope to make for your wife?

kingstreet

TrickyDicky101 wrote: »

I would presume the disparity in ages between the OP and his spouse may well cause problems if she is on the deeds/Land Registry entry to the property. OP, what provision do you hope to make for your wife?

Aye. Nil out of ten for observation on my part!

paulamy

Thanks but not sure what a OP is and how the difference in age between my wife and myself affects any applications I would make
Only my name is on the deeds

TrickyDicky101

OP = Original Poster.

Assuming your sole name is on the deeds then in theory you can sign up to any equity release/lifetime mortgage you like (although your wife may have rights to dwell in the property). However, what will she do after you eventually die? The mortgage would crystallise and would need repaying eg by selling the property thus depriving her of a residence.

The problem in the difference in ages is that for the kind of equity release/lifetime mortgage that Kingstreet mentioned, the provider (eg Halifax) will use an estimate based on expected lifespan to calculate when they will be repaid - the older you are the shorter the timescale until Halifax gets its money back. Because your wife is so much younger than you she will likely live substantially beyond when you expire, and so Halifax will have to wait much longer to be repaid. This increases the risk to Halifax and so makes the prospect much less attractive to them and hence may mean they won't offer you such a lifetime mortgage.

paulamy

Many thanks for all your coments which are really helpful - until recently I presumed other lenders would have the same conditins in lending to over 70's as RBS do
I fact we are not geting married until September - she takes the viewpoint that if we have to sell when I reach 70 and have to rent another property she will still have to find accomodation if I expire
She also is anxious to stay in our current property for as long as possible so an equity release arangment will allow this.
I presume I can give her some security on any remaining assets by way of a will if I expire before her

paulamy

Just another quick one
On looking at info sites on lifetime mortgages they suggest the maximum loan is around 33% of equity at age 70 - yet as originally posted I owe £120k on a £160k house - so would need around 70% of equity ??

Andy_Wilson_FS

paulamy wrote: »

Just another quick one
On looking at info sites on lifetime mortgages they suggest the maximum loan is around 33% of equity at age 70 - yet as originally posted I owe £120k on a £160k house - so would need around 70% of equity ??

You will not be able to release 70% of the value of the property with an Equity Release scheme. At age 70 the most you will get on a Lifetime Mortgage (roll up of interest scheme) is indeed around 33%. And if your wife is on the deeds, you can't arrange a Lifetime Mortgage until she is 55 and then the maximum loan is only 18% of the valuation.