Remortgaging at 73

System

This discussion was created from comments split from: Later life mortgage.

Alshamal

First post here so here we go I’m looking to remortgage I’m 73 and my existing mortgage is with Santander it runs out in July,
but they won’t let me remortgage for my age.I have £170k property with a £35k mortgage no other debts and sufficient  pension to fund a mortgage and live !
I’ve been looking at the Nationwide Later Life Mortgage interest only , and was wondering if anyone had any experience of the same or similar searches?
Any advice or information would be greatly appreciated!
Many thanks in anticipation 

MWT

Alshamal said:

First post here so here we go I’m looking to remortgage I’m 73 and my existing mortgage is with Santander it runs out in July,
but they won’t let me remortgage for my age.I have £170k property with a £35k mortgage no other debts and sufficient  pension to fund a mortgage and live !

Depending on the location and suitability of your property & your current health, you may want to look at equity release as an option.

You would need to take advice, but you can get that at no charge from Step Change, https://www.stepchange.org/how-we-help/mortgage-equity-release.aspx

This would let you release enough to clear the mortgage and perhaps a little more for comfort, but still allow you to pay the interest each year if you wished, without committing you to make those interest payments as would be the case with an interest only mortgage.

MSE_ForumTeam5

We've split this into a separate thread  

Linton

Alshamal said:

First post here so here we go I’m looking to remortgage I’m 73 and my existing mortgage is with Santander it runs out in July,
but they won’t let me remortgage for my age.I have £170k property with a £35k mortgage no other debts and sufficient  pension to fund a mortgage and live !
I’ve been looking at the Nationwide Later Life Mortgage interest only , and was wondering if anyone had any experience of the same or similar searches?
Any advice or information would be greatly appreciated!
Many thanks in anticipation 

You could look at a RIO (Retirement Interest Only Mortgage). This is like a normal IO mortgage except that there is no fixed end date.  When you die or enter care and/or the house is sold the loan capital is redeemed from the proceeds of the sale.

RIOs and Equity Release morgages are somewhat of a niche area.  You are likely to find that the providers are names you have not heard of, at least as residential mortgage providers, and they may not be prepared to deal with you directly.  For these reasons I think you would be best advised to go to a specialist mortgage broker.

I started off with a RIO but have now moved to ER whereby the interest is rolled up in the loan.  My concern with a RIO is that the interest rate may only be fixed for a limited period,  In retirement you may not be able to cope with a large increase in interest rates.  Under ER interest rates are fixed for the lifetime of the mortgage and so in that respect are much safer.

MWT

Additional information posted in the wrong place...

Alshamal

New here so be gentle with me! I’m just starting the process of remortgaging as my existing one ends soon,Santander wont let me remortgage because I’m 73. I’m looking to borrow £35,000, and my property is worth £170,000 I’ve had a couple of conversations one with A very well known provider! Which I brought to a close as i was not comfortable with the conversation and it seemed like I was being encouraged to borrowing more than I wanted to !  I spoke with another well known provider and the advisor who i was much more comfortable with and was ver patient and helpful! I was given details of a Retirement Interest Only Mortgage, Loan of £35,000 Property value of £170,000. @ £98.88 per month fixed for 10 years @ 3.30%,then 5 years @ £104.66 per month 3.59 % variable standard mortgage rate.
After 15 years Outstanding balance £34,982.09 Balance decrease £17,91(not sure what this means). Loan to value 20.58% Total amount payable £53,125.00.
Dose this look like these  repayment figures I should be expecting to pay from a majority of providers?
Any suggestions and advice would be greatly appreciated!
But I don’t want Chapter and Verse from Onlooker2 !!
Thanks🙏in anticipation 

RetSol

I'll kick the discussion off.

You are asking whether the rates offered are OK.  They look fine to me although you risk the SVR being higher than 3.59% in 10 years from now. 

That risk has been pointed out by @Linton above. 

I started off with a RIO but have now moved to ER whereby the interest is rolled up in the loan.  My concern with a RIO is that the interest rate may only be fixed for a limited period,  In retirement you may not be able to cope with a large increase in interest rates.  

The difficulty I see is that the term of the mortgage seems only  to be 15 years.  What are you go to do in 15 years time when the loan will be due to be repaid and you will, with luck, be around 88?

MWT

RetSol said:

The difficulty I see is that the term of the mortgage seems only  to be 15 years.  What are you go to do in 15 years time when the loan will be due to be repaid and you will, with luck, be around 88?

I suspect that was a 15 year illustration rather than a 15 year term as a RIO would normally only be repayable on death or entering long-term care.

The risk is obviously that the variable interest is unpredictable.

If the interest rate is right, a better alternative can be to use an equity release product that allows annual payments to offset the interest, but does not require them, so adding a little flexibility into the mix and fixing the interest rate for life.

RetSol

I suspect that was a 15 year illustration rather than a 15 year term as a RIO would normally only be repayable on death or entering long-term care.

Thanks, @MWT.  I thought that it was strange.....

If the interest rate is right, a better alternative can be to use an equity release product that allows annual payments to offset the interest, but does not require them, so adding a little flexibility into the mix and fixing the interest rate for life.

What would the "right" interest rate be for equity release on these terms, in your view? 

Alshamal

I also had a Lifetime Mortgage equity release  product offered ! £86.63 per month for life, 20.59% loan to value.Outstanding balance £35,000 total amount paid £50,593.40.