Mortgage ending. Cannot pay the balance

Hi, I have a friend who has a house where he has lived for many years. When his mother died he inherited a half share but in order to remain in the house he had to buy his sibling's share. He took out a mortgage with the Woolwich. There is still £60k outstanding. The house is worth about £170k.

The mortgage is to be repaid in about 3 years time. The Woolwich are saying that he can't extend it or take out a new mortgage because of his age. He is in his late 60's and on a declining income.

The Woolwich say that he will have to sell the house to pay them.

Are there any other options ? Will any bank lend him the £60k he needs to remain in the house and accept interest only payments until he pegs it ?

Thanks for any comments.
qui tacet consentire -

Who is silent gives consent.


  • The building society MIGHT let him stay on an interest only rate rather than throw him out.
    However it has to be said that if you cannot repay what you are contractually to do so they do have the right to sell to get their money back.
    Is there no family member that may want to buy a % of the house?
  • System
    System Posts: 178,086 Community Admin
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    Moving on from the thread saboteurs.....

    Has he explored that option of selling his house to a 3rd party but then still living in it for the rest of his life? It screws over the heirs of course but I wouldn't worry about them!

    Other option is of course just to sell and then downsize. Can he get a decent house in the area for £110k?

    I would be surprised if a bank would help him financially as his age is unfortunately against him.
  • silvercar
    silvercar Posts: 46,917 Ambassador
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    You would be better posting on the mortgage board. I can think of 3 options:

    1. selling up and buying something cheaper
    2. equity release - the interest is rolled up and paid from the proceeds when the property is eventually sold.
    3. His relatives help him out now. Whoever will inherit when he passes on in the fullness of time, may see a financial advantage in helping him keep the home now.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to (it's not part of my role to deal with this). Any views are mine and not the official line of
  • missile
    missile Posts: 11,684 Forumite
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    I am guessing he has an endowment mortgage?

    Perhaps he was ill advised and may have a claim?
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • @Missile. I took out an endowment mortgage in 1983 for 25 years with Lloyds Bank. They admitted the mis-selling but I could not get compensation due to the age of the mortgage. I could never understand why not especially as they admitted the mis-selling what differance did it make on the start date. Mis-selling to me is just that, so why no compensation?
  • jamesd
    jamesd Posts: 26,103 Forumite
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    He should read the FCA document Dealing fairly with interest-only mortgage customers who risk being unable to repay their loan.

    With a declining income and possibly insufficient income he may qualify as a "trapped customer" and merit protection from treatment like raising the interest rate compared to other customers.

    How tight is his income situation? Is it possible for him to manage repayment mortgage payments with an end date of say age 85? That would cost around £500 a month at 6% mortgage interest rate, a reasonable long term assumption. If he is able to manage that he should have a fair number of options involving the Woolwich or another lender, since there are some who do loans until age 85.

    If that is unaffordable an equity release mortgage is likely to be the best option using standard products. The question there will be whether the value of the property is high enough to get an equity release of the £60,000 currently needed to clear the Woolwich mortgage. If it is, that will do the job. It appears that this is just about possible. I tried age 68 at an equity release calculator and that gave around £57,000 available in normal health or £63,000 with less than normal good health. The available amounts increase as people get older, so this is quite likely to do it by the time he needs the option.

    Another option is to move to a cheaper place, both in value and in running costs. That could substantially decrease his costs and make it possible to repay any remaining mortgage amount. It's one of the best available options because it makes his general financial situation better due to the lower costs.

    Failing those normal options, another is to force Woolwich to try to repossess while he is making payments at a level that covers all interest and will eventually clear the mortgage, even if only on death.
  • could he take in a lodger / professional, even monday to friday?

    it could pay help him pay his mortgage off completely within a few years alongside what he is also paying.

    is he getting all the pensions/benefit that he is entitled to?
  • you may qualify for this if it is still running.

    it would allow you to stay in the property and pay a reasonable rent to the local housing association. plus you would have a few bob in the bank.
    :cool: Wisdom doesn't necessarily come with age.
    Sometimes age just shows up all by itself ;)

    In the end, it's not the years in your life
    that's the life in your years :D
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