Endowment mortgage has come to an end, what are we going to do?

Honeymonster_2

Hi everyone, I am hoping to get some advice here. Our endowment mortgage has come to an end and we do not have a policy in place to repay it. Our mortgage provider, who we have been with for the 25 year period, has said we can convert to a repayment mortgage but will have to apply for this like it is a new mortgage application over a 9/10 year period (husband is 61) Current outstanding amount is £82,000. We both have good credit history and no defaults on anything including our mortgage. I am employed with a salary of £25,000 and husband is self employed. His last years accounts were estimated and he is currently in the process of forming a limited company as his income is projected to be higher this year. Will we be able to get a repayment mortgage based on the above? We both have money sitting in pensions but ideally we don’t want to touch this.

la531983

An eight year mortgage assuming an interest rate of 4.5 to 5% would cost you well in excess of £900 a month, is this affordable?

silvercar

See a broker. There should be options, the salary multiple is not high on your salary alone, so it may be possible to have a longer period than 10 years.

Ayr_Rage

If there is no endowment in place to pay off the mortgage then what product do you actually have?

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82029996#Comment_82029996

I’d guess interest only.

Honeymonster_2

I should have said that the current value of our home is £450k. We do have some other assets that we could liquidate to repay part of the mortgage. Is it possible for me to get a mortgage on my income alone as this would seem more straightforward? If so, how much would I be able to borrow based on my income?

RelievedSheff

Go and see a broker who will be able to talk you over all of your options.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82030012#Comment_82030012

Given your age, you also have the option of Retirement Interest Only ( RIO) mortgages, example below

https://www.legalandgeneral.com/retirement/retirement-interest-only-mortgage/

As you will see such mortgages can be used to repay an outstanding mortgage, but with the benefit of there being no fixed repayment date for the capital, as long as you can continue servicing the interest into retirement.

MWT

https://forums.moneysavingexpert.com/discussion/comment/82030012#Comment_82030012

You mentioned that your husband is 61, how old are you? (just trying to understand all of your options).

If you dedicate your salary to covering the mortgage can you live on the earnings from your husband's business?

Just to get into the right mindset, you are not 'converting' to a repayment mortgage, you have just reached the end of your interest only mortgage with it seems no plan for repayment, so you have to apply for a new mortgage (which could be from any lender) so you can avoid defaulting on the current mortgage.

Have you already past the due date on the current mortgage or do you still have a little time left before you default?

Honeymonster_2

I am 58. We have reached the end of our mortgage and I have been talking to our current lender and explained that we need a little time to get things in order. I have made an appointment for next week with a broker to see what they will advise but just worried that they will only have high street lenders and our options might be limited with them.

MWT

https://forums.moneysavingexpert.com/discussion/comment/82030055#Comment_82030055

RIO products have the difficulty of affordability being assessed on each life individually requiring sufficient guaranteed income for each life through retirement, but depending on age there may be some Equity Release products that are suitable if they need more flexibility on repayment than can be had with a standard mortgage product.