What can we do?

MWT

I'm also still puzzled about how the mortgage was obtained in the first place, there must have been something offered at the time as the vehicle for paying off the loan.

I'm wondering if it was a planned lump sum withdrawal from a pension scheme for example, but it would have had to have been a very large fund to be able to cover that sort of amount...

Mickey666

Could some sort of equity release deal help?

[Deleted User]

MWT said:

I'm also still puzzled about how the mortgage was obtained in the first place, there must have been something offered at the time as the vehicle for paying off the loan.

I'm wondering if it was a planned lump sum withdrawal from a pension scheme for example, but it would have had to have been a very large fund to be able to cover that sort of amount...

I got an interest only mortgage when i was 19 around about the same time as OP's parents. I was told to say I had an inheritance due that would pay it off as that doesnt trigger a requirement for proof.   
Luckily I got a bit older and wiser and realised that it wasnt such a good idea and have been on repayment mortgages since.   But after so many years working in this industry, I can believe most things that other people find bizarre.  It was like the Wild West for so long

MWT

Mickey666 said:

Could some sort of equity release deal help?

Equity release requires that the mortgage is fully paid off, either before or from the proceeds of the release, but even at the age of 68 which they may be when the mortgage falls due the most they could get, unless there are significant medical conditions impacting them both, would be about 40% (under current conditions).

... and 40% isn't likely to be enough without some more serious capital repayment over the next 5 years...

MWT

Deleted_User said:

I got an interest only mortgage when i was 19 around about the same time as OP's parents. I was told to say I had an inheritance due that would pay it off as that doesnt trigger a requirement for proof.   
Luckily I got a bit older and wiser and realised that it wasnt such a good idea and have been on repayment mortgages since.

That's the point though, whatever was done to slide past the proof requirement at the time it is important not to believe it yourself...

[Deleted User]

MWT - back then before the MMR rules came in, you did not need proof of repayment vehicle. The likes of Northern Rock and self certify mortgages meant that interest only mortgages were given out like confetti. I know I had several at the time that suited my short term plans before converting to repayment mortgages. 

Thrugelmir

MWT said:

I'm also still puzzled about how the mortgage was obtained in the first place, there must have been something offered at the time as the vehicle for paying off the loan.

I'm wondering if it was a planned lump sum withdrawal from a pension scheme for example, but it would have had to have been a very large fund to be able to cover that sort of amount...

Whatever the rights and wrongs of the past. 13 years have passed with no action on the part of your parents. In that time frame interest rates have reduced and most likely their income has increased. Your parents will have been written to on several occcasions over recent years asking how they proposed settling the mortgage. The unavoidable fact is that we all have choices. 
Doing nothing is self inflicted. 
Overpaying is the place to start. As reducing the capital owed reduces the interest charged. Creating a snowball effect. At least then they would have some equity if the property has to be sold to redeem the mortgage. 
What pension provision do your parents have? Is a short term extension to the mortgage possible. If nothing else but to boost the equity. 

MWT

Not 'my parents', Ellalou is the OP.

Ellalou

Thanks everyone for your comments. Yes it’s not a good situation, I do believe the financial advisor who was a mortgage specialist wasn’t sure of any solutions. I’m not sure myself if there actually will be any either but I’m trying to help with a bad situation. They have not overpaid up until now, that is something they probably could have done but there is no point in dwelling on the past. They have both got secure jobs and will work for at least the next 5 years. My mum has a private pension and my dad will receive a state pension. I’m hoping over the next 5 years we can pay into this mortgage as much as possible, if nothing else it means that they will receive more money back if they sell and will be able to buy something else. Or there is some sort of solution in the interim..I am still seeking advice but at least we are going in the right direction and they are not burying their heads in the sand like they were. 

Ps. Everyone and anyone were given interest only mortgages when they took it out. It even says on their mortgage paperwork that they never advised the mortgage company how they intend to repay the loan.

Thanks