Interest Only Mortgage due

Lynneg35

I have an Interest only mortgage that is due for redemption Oct 2025.  Despite never having a late or missed payment I can't get another interest only mortgage, they only offer these to people on high wages with a highly valued property (In excess of the £320,000 that mine's valued at). I don't earn enough to be able to afford a repayment mortgage.  I owe £92,000. I'm 58, disabled, work but on a low income.   Please would anyone have any advice?

Caz3121

what were your plans originally for paying the mortgage capital? is it possible to sell and downsize with your equity?

DullGreyGuy

Then pay it off? Thats the idea of interest only mortgage, that you are saving funds to repay it by the end

freesha

What was your plan to pay it off? Just do that. You DID have a plan for when this happened.... right?

ACG

There are lenders who may do interest only or part and part but they will likely be smaller building societies. That will mean higher rates than the high street. Speak to a broker. 

TadleyBaggie

I only ever had interest only mortgages, I had endowment policies in place to pay the majority off (plus taking a lump sum from a pension).

whizzywoo

Look into a Lifetime Mortgage - it's a type of Equity Release mortgage.  They are available to people over 55 years.

But because of your age they will probably only agree to a low Loan to Value mortgage.  I'm not sure if your equity in the house would be enough.

You can choose whether or not to pay the interest on the mortgage or let it roll up.  You can also choose to pay amounts off the capital.

You will need to go to a broker who specialises in Equity Release because you can't apply for these without being referred,

Lynneg35

Thank you for your comments. Of course I had a plan, those comments are obvious and not helpful.  When I took out the interest only mortgage I had just come out of a divorce, had 3 children and was not working.  I got the mortgage as I had an 80% deposit - which they wouldn't do these days.  My plan was to get a job - which I did, and once in work re-mortgage with a repayment mortgage.  Within a couple of months working I became very ill  with MS.  I couldn't work full time any more, my salary decreased but I continue to work part-time.  I was going to downsize but there's nothing in my area that I can afford and I want to stay close to family. I have no debts and have never missed any payments for anything.

whizzywoo

Lynneg35 said:

Thank you for your comments. Of course I had a plan, those comments are obvious and not helpful.  When I took out the interest only mortgage I had just come out of a divorce, had 3 children and was not working.  I got the mortgage as I had an 80% deposit - which they wouldn't do these days.  My plan was to get a job - which I did, and once in work re-mortgage with a repayment mortgage.  Within a couple of months working I became very ill  with MS.  I couldn't work full time any more, my salary decreased but I continue to work part-time.  I was going to downsize but there's nothing in my area that I can afford and I want to stay close to family. I have no debts and have never missed any payments for anything.

Because you have MS a Lifetime Mortgage may be available to you on more favourable terms.  I remember our mortgage broker mentioning various illnesses which would do this when we applied for ours. 

I think it's to do with your life expectancy being less than people without an illness.  Not very nice to think about but you may as well take advantage where you can, you didn't ask to get MS.  I have breast cancer and it made a difference for us.

MWT

Lynneg35 said:

I have an Interest only mortgage that is due for redemption Oct 2025.  Despite never having a late or missed payment I can't get another interest only mortgage, they only offer these to people on high wages with a highly valued property (In excess of the £320,000 that mine's valued at). I don't earn enough to be able to afford a repayment mortgage.  I owe £92,000. I'm 58, disabled, work but on a low income.   Please would anyone have any advice?

As mentioned above, Equity Release may be an option worth exploring, and yes, you may be able to get more favourable terms based on your health.

... but a lot depends on the nature of your property as the lenders can be very picky about what they will accept, but hopefully this will not be an issue for you.

Some key aspects to be aware of are their dislike for any adjacent commercial property, pylons or non-traditional construction.

So if your home is well maintained and in a typical residential street, with brick construction you are less likely to have any issues on that front.

If it is a steel-framed, poorly maintained house next to a chip-shop then this probably isn't a route you can take.

Getting an equity release product requires that you take advice, that advice can range from free to expensive, so I'd suggest starting at the free end of the scale with somewhere like StepChange, so you can explore the possibilities and then decide if this is a route you want to use without getting involved in additional fees...

freesha

Lynneg35 said:

Thank you for your comments. Of course I had a plan, those comments are obvious and not helpful.  

It's not obvious at all - you should have mentioned it in the OP.