Worries about paying mortgage after retirement!

rhinocharge1

I am posting for the first time for some professional advice that may improve my financial situation. I am now 58 and over the years I have been burying my head in the sand for too long. I have lived for the present stupidly imagining that future inheritance will resolve my problems.

Currently, we have a mortgage debt of £135k and the mortgage is payable until I am 76 in 2032. This is held at 2.5% as a loyal customer of Nationwide. I am not tied into any deal currently; the property is worth around £270k. The problem is that we’re hoping to retire in 2018 which would probably mean an outstanding mortgage debt of around £120k. If possible I would like to renegotiate my mortgage at that point possibly to facilitate a house move, and to significantly reduce the monthly repayment (£746 currently) maybe meaning the mortgage would be repaid on death out of the capital in the property, or earlier if I inherit
Are there mortgage options available that can help me? Any advice or suggestions would be very welcomed.

Caz3121

rhinocharge1 wrote: »

I am posting for the first time for some professional advice that may improve my financial situation. I am now 58 and over the years I have been burying my head in the sand for too long. I have lived for the present stupidly imagining that future inheritance will resolve my problems.

Currently, we have a mortgage debt of £135k and the mortgage is payable until I am 76 in 2032. This is held at 2.5% as a loyal customer of Nationwide. I am not tied into any deal currently; the property is worth around £270k. The problem is that we’re hoping to retire in 2018 which would probably mean an outstanding mortgage debt of around £120k. If possible I would like to renegotiate my mortgage at that point possibly to facilitate a house move, and to significantly reduce the monthly repayment (£746 currently) maybe meaning the mortgage would be repaid on death out of the capital in the property, or earlier if I inherit
Are there mortgage options available that can help me? Any advice or suggestions would be very welcomed.

Can you overpay as much as you can afford over the next few years while you are still working
Will you be due a pension lump sum that you will be able to pay to the mortgage
As far as moving, you may be able to port your existing deal however you will go through the application the same as a new applicant so will need to fit the lenders criteria at the time.
You probably do need to get professional advice

rhinocharge1

Caz3121 wrote: »

Can you overpay as much as you can afford over the next few years while you are still working
Will you be due a pension lump sum that you will be able to pay to the mortgage
As far as moving, you may be able to port your existing deal however you will go through the application the same as a new applicant so will need to fit the lenders criteria at the time.
You probably do need to get professional advice

Approx £75 when I retire but I have calculated that I will need that post retirement. I have no other savings which I really regret now.

What I am hoping is that there are lenders who would give me a mortgage that would be lifelong I.e up until my death, and the balance be repaid from the property value after death. I guess if I inherit then I would pay off the debt. What do you think?

Foxy-Stoat_3

Can you not downsize now and clear the mortgage?

Thrugelmir

Interest rates aren't going to stay at 2.5%.

If you've limited post retirement income then your options are going to be limited. Start planning on downsizing.

MsHoarder

Your options are:
1. Pay it off with a lump sum at retirement (but ensure you leave yourself enough to pay bills/food)
2. Continue working until mortgage is paid off
3. Make the necessary sacrifices to overpay now and bring your mortgage term down (overtime, no holidays etc)
4. Sell the house and downsize to get a smaller/no mortgage.

The members of this site aren't generally professional financial advisers btw: if that is what you want then your local high street probably has someone suitable.

p00hsticks

rhinocharge1 wrote: »

Currently, we have a mortgage debt of £135k

You say 'we' - does that mean that there is also a spouse/partner involved ? do they contribute to the mortgage and are they named on the mortgage and/or deeds? How old are they ? If you could get such an equity release product where the property is sold on your death to meet the mortgage owing, where do you see them living if you die before them ?

rhinocharge1 wrote: »

the mortgage is payable until I am 76 in 2032.

Do you mean that it is a repayment mortgage that will be fully paid off at that time - or is it an interest only mortgage with the term expiring and balance to be repayed then ?

rhinocharge1 wrote: »

we’re hoping to retire in 2018....

Any particular driver for wanting to retire at 62 ? To be brutal, it sounds like you really can't afford to and remain in your current property with your existing lifestyle. Unless you have some mediacal reason to suggest you might have a shortened life expectancy, I'd think that 62 is very young to be looking at any sort of equity release products - you could be looking at a thirty to forty year timeframe