One problem that a number of older people face currently is how to pay off their interest only mortgage when it reaches the end of the mortgage term.
The Lifetime Mortgage is helping many in such a situation. The borrowing is based on age and property value only so it avoids many of the obstacles that the majority of lenders throw up. For those 55 and older it is possible to have an interest-only lifetime mortgage which can go on as long as they live. Besides repayment of interest, it is also possible to repay capital – although there may be early repayment penalties. Since this borrowing is based only on age and property value, it can help those who might not otherwise be able to borrow money. It can also provide a potential solution for those who have had an interest-only mortgage which is coming to the end of the mortgage term. Note: A Lifetime Mortgage cannot be arranged in addition to an existing mortgage. Any existing mortgage must be repaid. Lifetime Mortgages range from about 20% of property value for those aged 55 to about 50% for those aged 80. Here is a sample table of the maximum borrowing that may be available (note: in the case of a couple the providers will work on the age of the younger):
Age % of Age % of
55 20% 70 40%
60 30% 75 45%
65 35% 80 50%
We can provide estimates for you to help with your planning if you feel this approach may suit your circumstances.