Mortgages for people close to retirement

worriedne

So, due to a variety of issues including poor health, we had to switch to an interest-only mortgage when we only had 6 years left on our mortgage.  It has worked well and allows us to pay a low payment each month. The problem is that the lender won't allow IO to continue after next year when I reach 65. It has to be converted to repayment or we have to sell (which we really don't want to do for a while).
I saw an interest only mortgage offered by Nationwide upto age 85 BUT it says you must be receiving a pension to apply. I don't qualify for state pension until almost 2 years time.  That leaves a year between having to end current mortgage and being eligible for the next.
The only options I seem able to find are equity release or a lifetime mortgage but at some point we will need to downsize since there is a very big garden which will become a struggle in later life.  From what I've read, lifetime mortgages usually can't be paid off until you die or move into care home (!) or there are stiff penalties.They also appear to be MUCH more expensive than a normal interest only mortgage per month - more bad news for older applicants
It really seems the people falling between the gaps due to changes in pension age are stuck. My wife still has a salary from part-time profession - it's more than my pension will be so it seems odd that we can only apply once I get a state pension. Does anyone know if lenders ever consider making exceptions to rules like this? It seems nutty that we can't yet apply but we will be able to apply once we stop working. (You can actually apply from age 55 but you must have a pension).
Alternatively does anyone know of any other options available - apart from finding an investor who would lend us the amount outstanding and accept monthly interest until we sell

Thrugelmir

Lenders can only underwrite on the basis of your current personal and financial circumstances.  How much is still owed on the mortgage? 

MovingForwards

Why are you reluctant to downsize now? It will be easier than in 10 years time.

How much is the outstanding mortgage?
What's the property worth?
What's your wife's annual salary?
How old is your wife?
Do you claim PIP or anything?
What pension do you expect to receive per year when you reach retirement? (Private / state)
Do you have any savings?

There are lenders who do lend into retirement, depending on your answers to the above, a good broker may be able to assist.

Keep_pedalling

Downsizing does not get easier the older you get. Bite the bullet now.

worriedne

Ah, pretty much the replies I expected - and I KNOW  it makes sense to do it now but we've lived here for 40 years and it's not the usual house on a street.
It's rural in nature - us and the birds -  but close to town and we enjoy the peace and quiet and amazing wildlife and views. Plus we brought up our family here - really hard to think about moving and we have SO MUCH stuff - I need retirement to be able to get enough time to clear out in readiness for a move
Thank you so much everyone.

MovingForwards

@worriedne that's answered the first part, so how about the other part?

There may be mortgage options, if the numbers add up.

worriedne

Hi - sorry.
outstanding £130k - property last valued at c£400-475k (agent said difficult to assess since it's a one-off and depends if two people wanted to bid against each other.)
Wife's part-time salary - £23k - she will be 62 this year.
Don't claim any type of benefits and never have.
Zilch in savings. Pension will be state pension amount (wife joined a pension about 3 years ago but really just to save up a little since clearly it wouldn't provide any income).
Currently paying around £190pm in interest only. 

thanks

worriedne

sorry - if it might help, I work from home and declare c£8k per year profit to HMRC.