Retirement Interest Only Mortgages

shriek65lincs

We are in our late 50's, we have no dependants and therefore no one to leave an inheritance to. We are trying to find a lender willing to provide an interest only mortgage to allow us to purchase a new home without dipping into our ISA Savings Pot. Keep finding only Equity Release options.
Any help gratefully received. 

Hoenir

Interest only mortgage options are limited these days. The issue for lenders is that they've no control over what you do with your savings. Do you have enough guaranteed pension income income to service an interest only mortgage ?  In this scenario there might well be a situation where there's just one of you left to service the debt. As individuals do you have the financial strength to cope. 

kingstreet

Presumably when you say "Equity Release" you mean a lifetime mortgage with interest roll-up. Are you aware some of these products allow you to make monthly payments?

Alternatively, what about a standard interest-only mortgage until you retire then look at lifetime options? We've done something similar recently.

Why don't you get advice from an IFA or broker with lifetime permissions who can advise you on all the options?

whizzywoo

We recently looked into an Interest only lifetime mortgage (RIO) but we didn't pass the affordability criteria.  Because if one of us dies the other can't afford the repayments.  I can't get life assurance because of a Cancer Diagnosis 18 months ago, even though I am apparently now No Evidence of Disease (NED).  No one will look at life assurance for me for another 5 years.

You need to see a Mortgage Broker or Financial Advisor who deals with Equity Release because the lenders won't accept a direct application.  There are also legal fees and broker fees.  

We have just received an offer of a Lifetime Mortgage from Standard Life.  We have chosen to pay the interest  monthly so that compound interest doesn't build up.  We can also make payments off the capital, limited to 10% of the amount outstanding with no penalties.  We can choose to stop these payments at any time but the amount outstanding racks up extremely quickly.

The penalties reduce each year until year 8 and then they are zero.

It's possible we will pay ours off in the next 10 years with a possible inheritance.  But we would like to leave an inheritance to our children.

However we are aged 71 and 66.  You might find that being younger won't work quite as well for you.  The interest rate may be higher and you may not be able to borrow as much.

hopetohelpagain

The Scottish Building society have a number of Interest only mortgages for older people. Details on their website although  not sure if available to those living outwith Scotland.