Aged 63 & Interest-Only Mortgage ending

onesixfive

I have £90,000+ interest only mortgage which is due to end in 2017.
I am 63.
My wife is 60. She does not work.
My property is likely worth in the region of £220-250k.
I have a lump sum due from my pension of £30k due in 2017.
I have been offered a repayment mortgage for 12 years of £800+ per month which will last until I am 75.
I have a small private pension which will supplement my retirement pension but will unlikely cover this monthly amount.
I'm told there are no lifetime deals.
Any alternative options please to this massive repayment mortgage ? If so - where from please?

martinsurrey

sell and downsize?

not many other options that are better in the long run.

onesixfive

martinsurrey wrote: »

sell and downsize?

not many other options that are better in the long run.

Not much available in the market from the leftover £120-£150k

pinkteapot

sng165 wrote: »

Not much available in the market from the leftover £120-£150k

£150-180k with your pension lump sum?

haras_nosirrah

downsize to something where you can afford the monthly repayment in retirement

e.g. instead of a 60k mortgage over 12 years being £800 would a 30k mortgage over 12 years at £400 be affordable as this would get you to 150 - 180k mark

ultimately an interest only mortgage was always going to need repaying at some point. What was your original plan?

martinsurrey

sng165 wrote: »

Not much available in the market from the leftover £120-£150k

"not much" now is better than a repossession later.

Sorry to be blunt, but getting real now, will be better than waiting for when the bank comes knocking.

onesixfive

haras_nosirrah wrote: »

downsize to something where you can afford the monthly repayment in retirement

e.g. instead of a 60k mortgage over 12 years being £800 would a 30k mortgage over 12 years at £400 be affordable as this would get you to 150 - 180k mark

ultimately an interest only mortgage was always going to need repaying at some point. What was your original plan?

• £90k is £800 over 12 years.
• I see what you are saying about using the £30k to offset, or use towards downsizing - we were setting this aside for emergencies/repairs etc.
• I understood there would be a lifetime mortgage deal, with the remaining equity release on death.

haras_nosirrah

is a £550 a month mortgage affordable (paying in the 30k)

if not then you will have to move if the lender won't offer a lifetime mortgage or you can't find someone who will.

There may be an equity release type arrangement available but this is specialised lending and you would need a special broker for that - also if you have kids they will not get any inheritance from the house

could you not buy somewhere £150 - £180k mortgage free (using your 30k lump sum)

the emergency is now. The longer you leave this the worse that payment is going to get as the number of years will only go down

missbiggles1

Could you spend the next couple of years overpaying the new mortgage (perhaps your wife could get a job?) so that in 2017 and after using most of your lump sum, the repayments would be affordable?

missbiggles1

sng165 wrote: »

I have £90,000+ interest only mortgage which is due to end in 2017.
I am 63.
My wife is 60. She does not work.
My property is likely worth in the region of £220-250k.
I have a lump sum due from my pension of £30k due in 2017.
I have been offered a repayment mortgage for 12 years of £800+ per month which will last until I am 75.
I have a small private pension which will supplement my retirement pension but will unlikely cover this monthly amount.
I'm told there are no lifetime deals.
Any alternative options please to this massive repayment mortgage ? If so - where from please?

You seem to have aged very rapidly in the last couple of months!

https://forums.moneysavingexpert.com/discussion/comment/68095599#Comment_68095599

audigex

£90k over 12 years may be impossible at £800 a month
£130-160k may not buy you much now

So why not split the difference?

Add £20k from your lump sum to your £130-160k equity
Then take out a much smaller mortgage for, say, £30k

That leaves you with £150-180k cash towards a £180-210k house, £10k savings for repairs (buy a house in good repair), and repayments more in the region of £200-250 a month at current rates