Interest only ends when I am 65

paulo100

Hi
I am hoping someone will be able to give some advice on my situation, before I talk to my mortgage provider.
For reasons I don't need to go into in detail here (business failure 20 years ago) I have been on an interest only mortgage ever since.
Some 5 years ago I moved to the Nationwide and had a fixed mortgage which ran its course 3 years ago, since then I have been on a very low variable rate.
My mortgage runs it's full term when I am 65, which is in 3 years 6 months time.
My question is, will Nationwide agree to extend the mortgage beyond 65? (I will have sufficient income to cover the repayments).
If they do not allow mortgages beyond 65 what would be the likely situation, as I would not be in a position to repay the mortgage without being forced to sell my home.
Any advise would be much appreciated.

R_P_W

What is your shortfall going to be?

paulo100

I owe £165,000 with a very low LTV rate.

geoffken

Get ready to move.
Since your business failure 20 years ago did you not have any time in that 20 years to think how you would repay this debt.
If you think that Nationwide will wait until you die then think again.

paulo100

Thanks for your reply. Appreciate it.
I was interested in hearing if anyone knows if Nationwide have a cut off age for mortgages. I understand it's 65 for some and 70 for others.
Actually, there are other options other than 'get ready to move' but I was interested in experiences of others re continuing a mortgage beyond 65.

TrickyDicky101

The problem is, you owe NW this money and you have no repayment plan in place (other than presumably selling the property at some point in the future).

NW has no obligation to fund your lifestyle (which is effectively what you want it to do) and it is highly unlikely to extend an IO mortgage for you.

What are your other options?

paulo100

Hmm, there seems to be a misunderstanding here, although I thought my original post was quite clear (I tried to make it so, at least).
I don't need to 'get ready to move', nor am I expecting the NW to 'fund my lifestyle'. I can't help but note an undertone of admonishment in both replies so far.
Just to make it crystal clear, I am interested in hearing whether the NW has a cut off date for granting mortgages, i.e. 65, or whether they allow a mortgage to continue if the mortgagee can prove the ability to pay the monthly outgoings, which I can easily do.
I don't think there is anything ambiguous about this question.
As to what other options are available, well clearly I could downsize; as has already been suggested; I could take out a lifetime mortgage (with the added bonus of reducing my children's inheritance tax obligations), or I could pay off the mortgage from existing savings. My preference, would be to continue with a mortgage for a few more years. Hence my originalquestion

tanith

paulo100 wrote: »

Hi
I am hoping someone will be able to give some advice on my situation, before I talk to my mortgage provider.
For reasons I don't need to go into in detail here (business failure 20 years ago) I have been on an interest only mortgage ever since.
Some 5 years ago I moved to the Nationwide and had a fixed mortgage which ran its course 3 years ago, since then I have been on a very low variable rate.
My mortgage runs it's full term when I am 65, which is in 3 years 6 months time.
My question is, will Nationwide agree to extend the mortgage beyond 65? (I will have sufficient income to cover the repayments).
If they do not allow mortgages beyond 65 what would be the likely situation, as I would not be in a position to repay the mortgage without being forced to sell my home.
Any advise would be much appreciated.

If you can pay off the mortgage with existing savings why do you say in your opening post you would not be in a position to repay the mortgage without being forced to sell your home? you either have the money to pay it off or you don't:o

Cornucopia

Ultimately you are only going to find out from the Nationwide.

My guess would be that they will allow the mortgage to continue to 70. However, if you have savings to cover the mortgage debt, now, that will probably be the more economical option.

In fact, depending on your income between 65 and 70, you may find yourself in a worse position at 70 than at 65 (because you may have a very limited income and be making interest payments).

I also doubt that your circumstances are amenable to a lifetime mortgage.

Jimbo1976

I don't think Nationwide, like most lenders have a precisely defined policy for those who have interest only mortgages which expire without the individual paying off their loan.

The FSA has done some work looking into this and should be publishing the data (as to how many people are and will be affected) in Q1 this year. I am sure this will come with guidance for lenders and consumers.

Essentially Nationwide won't turf you out but they will contact you to discuss how you are going to repay your loan. If you are still working or will receive a pension and can continue to pay the mortgage they may give you a term extension.

paulo100

Great, thanks for the replies. I agree that I will naturally need to speak to NW, just wanted to check the possible scenarios before doing so.
I had an idea that there might not be a hard and fast rule on this, but your confirmation that this might be so is helpful. A term extension is my preference. I will be in a position to continue paying the monthly charge although I accept that my very low interest rate would not be continued into a new term.
Cornucopia wrote 'I also doubt that your circumstances are amenable to a lifetime mortgage' Can you expand on this please? Is that a general comment on Lifetime mortgages, or more specifically for me?
In fact, I think a Lifetime mortgage would be very suitable for me, in so far as my children will eventually face a hefty inheritance tax issue, which would be somewhat reduced by me effectively taking a loan against the current assets, and thus reducing the value of the eventual inheritance, sometime in the future.