Mortgage for over 60s based on assets rather than income

sportsw4

Hi there. Wondering if anyone can give me some advice... the interest only mortgage on my home is coming to the end of its term in just over 2 years. For various reasons, I'd like to keep the property mortgaged for at least a few more years, at which point I'll downsize and pay off the mortgage. I've already established that my existing provider, Halifax, won't extend the term or give me a new mortgage because I won't meet their income criteria (I'm 63 and moving towards retirement...) I do however have plenty of assets in terms of savings and investments, and about £450-£500k capital in the property (I'm looking to borrow £200k) - way more than needed to cover the mortgage. Does anyone know whether what I'm trying to do is possible - and, if so, could they point me in the direction of any companies/people it might be helpful to talk to?
Many thanks!!

Browntoa

It's called "equity release" 

Not an option I would use though

MWT

I would agree, if you plan to downsize in a few years, equity release would be an expensive solution, better to downsize at the end of the current term.

Can you use the 'savings and investments' and your earnings over the next 2 years to bring the mortgage requirement down to a level that you can justify on your post-65 pension?

Also do talk to a broker to establish what others might lend you based on your post-65 income...

sportsw4

Browntoa said:

It's called "equity release" 

Not an option I would use though

Thanks... :-:smile: I am familiar with equity release and would prefer not to use that at this stage at least. Just looking for a good old-fashioned mortgage...

ACG

It would not fit with any lender as they have to able to evidence (under FCA rules) that you can afford the monthly repayments. 
In theory you could go and blow your savings and investments and then have no way to repay the mortgage, that then opens them up to a complaint from you down the line. 

Self cert mortgages no longer exist. 

Thrugelmir

Why not settle the mortgage from your savings and investments?  Bank your gains and reduce the potential downsides of leveraging up with debt. 

K_S

sportsw4 said:

Hi there. Wondering if anyone can give me some advice... the interest only mortgage on my home is coming to the end of its term in just over 2 years. For various reasons, I'd like to keep the property mortgaged for at least a few more years, at which point I'll downsize and pay off the mortgage. I've already established that my existing provider, Halifax, won't extend the term or give me a new mortgage because I won't meet their income criteria (I'm 63 and moving towards retirement...) I do however have plenty of assets in terms of savings and investments, and about £450-£500k capital in the property (I'm looking to borrow £200k) - way more than needed to cover the mortgage. Does anyone know whether what I'm trying to do is possible - and, if so, could they point me in the direction of any companies/people it might be helpful to talk to?
Many thanks!!

@sportsw4 To what age do you need the term to be, is there any regular income coming in from the assets, what's your current income and what kind of work do you do, is there any kind of pension income coming in post retirement? 

Given the low LTV, there may be options available depending on the above but even if it is possible, it's unlikely to be at mainstream resi rates.

sportsw4

Thrugelmir said:

Why not settle the mortgage from your savings and investments?  Bank your gains and reduce the potential downsides of leveraging up with debt. 

I could certainly do that - but for a couple of personal reasons, I'd prefer not to use the savings and investments at this point. Happy to do so in a few years time though... although it's sounding as if I may not have a lot of choice if I want to stay in my current place! 

sportsw4

K_S said:

sportsw4 said:

Hi there. Wondering if anyone can give me some advice... the interest only mortgage on my home is coming to the end of its term in just over 2 years. For various reasons, I'd like to keep the property mortgaged for at least a few more years, at which point I'll downsize and pay off the mortgage. I've already established that my existing provider, Halifax, won't extend the term or give me a new mortgage because I won't meet their income criteria (I'm 63 and moving towards retirement...) I do however have plenty of assets in terms of savings and investments, and about £450-£500k capital in the property (I'm looking to borrow £200k) - way more than needed to cover the mortgage. Does anyone know whether what I'm trying to do is possible - and, if so, could they point me in the direction of any companies/people it might be helpful to talk to?
Many thanks!!

@sportsw4 To what age do you need the term to be, is there any regular income coming in from the assets, what's your current income and what kind of work do you do, is there any kind of pension income coming in post retirement? 

Given the low LTV, there may be options available depending on the above but even if it is possible, it's unlikely to be at mainstream resi rates.

@K_S Flexible on the term - but ideally until I'm around 70. Yes, there's around £1k a month coming in from the assets. Work for myself as an instructional designer - income historically good, but scaling down work significantly now, so not sure there will be all that much coming from that in future. I've got a personal pension - but not a regular income paying corporate one, as I've been self-employed for most of my career. Sounds like it may at least be worth talking to a FA...?

sportsw4

Many thanks for all the feedback folks - appreciate it!

K_S

sportsw4 said:

K_S said:

sportsw4 said:

Hi there. Wondering if anyone can give me some advice... the interest only mortgage on my home is coming to the end of its term in just over 2 years. For various reasons, I'd like to keep the property mortgaged for at least a few more years, at which point I'll downsize and pay off the mortgage. I've already established that my existing provider, Halifax, won't extend the term or give me a new mortgage because I won't meet their income criteria (I'm 63 and moving towards retirement...) I do however have plenty of assets in terms of savings and investments, and about £450-£500k capital in the property (I'm looking to borrow £200k) - way more than needed to cover the mortgage. Does anyone know whether what I'm trying to do is possible - and, if so, could they point me in the direction of any companies/people it might be helpful to talk to?
Many thanks!!

@sportsw4 To what age do you need the term to be, is there any regular income coming in from the assets, what's your current income and what kind of work do you do, is there any kind of pension income coming in post retirement? 
Given the low LTV, there may be options available depending on the above but even if it is possible, it's unlikely to be at mainstream resi rates.

@K_S Flexible on the term - but ideally until I'm around 70. Yes, there's around £1k a month coming in from the assets. Work for myself as an instructional designer - income historically good, but scaling down work significantly now, so not sure there will be all that much coming from that in future. I've got a personal pension - but not a regular income paying corporate one, as I've been self-employed for most of my career. Sounds like it may at least be worth talking to a FA...?

@sportsw4 Based on what you've said (especially the already scaled down income), it's very unlikely that you'll be able to get a repayment mortgage for a 6-7 year term. As I see it, your best bet would be an interest-only mortgage with a lender who will accept a repayment vehicle based on your current investments or the plan to downsize (usually only works if it is plausible that you can sell your property and comfortably buy another one from the proceeds without relying on a mortgage) later on. These lenders will use some form of affordability assessment but are flexible with the term.

In any case, it all boils down to the specifics and the numbers. Imho, definitely worth talking over with your financial adviser or broker. Good luck!