Help required - Interest only with pension pot repayment

Topcatk

Hi all,

I would be grateful if anyone could advise on whether they have had a lender approve a interest only mortgage on the basis of a future pension pot repayment?

We currently have a FD offset, fixed rate for another year. We have sold and are buying a property and planning to put down 25%. Unfortunately FD only offer a 2 year offset fixed rate; we would like to fix for a longer period.

I really liked the idea of the TSB 10 yr fix and flex, however despite over £800k in a pension fund, they wouldn't let us do interest only, stipulating that they would only consider a pension pot of in excess of £1M and all UK based funds!.

Do you therefore know any lenders that are likely to allow an interest only, against the 800K mixed funds pension pot? The property we are planning to buy is £245k and we will put down a £60k deposit. We currently have an income of excess of £90k.

Many thanks in advance.

TadleyBaggie

Abbey National did for me but that was in 1992!

amnblog

A number of Lenders will do this but there is much more that they will consider in addition to the pension fund size.

Speak to a good broker.

Richard_Pia

So you are looking for an interest only mortgage of £185k with a pension pot of £800k as the repayment vehicle? There should certainly be some lenders that would entertain this. It may depend on how much of the pot is invested in overseas funds, as I'd imagine most lenders would want them to be UK-based. As above, a good broker will be able to provide further guidance.

Linton

We have an Interest Only lifetime mortgage with the option at 80 to convert to roll-up, partially justified by stated income from drawdown. It was bought through an IFA/mortgage broker with experience of equity release who was able to explain our situation to the underwriter. However the the maximum loan was age dependent, in our case 50%.