This year, the Financial Conduct Authority released figures which suggest that 40% of borrowers who took out a mortgage in 2017 will be aged over 65 by the time their mortgage matures[i]. Later life lending is increasingly becoming a mainstream requirement as people live and work much later in life. Although a number of High Street lenders have launched products for this market, when it comes to large mortgages, our clients consistently find that they require specialist expertise from our team to ensure their specific requirements are catered for.
Our recent case involved a client who was nearing 70 years old and well established in the medical profession, with no plans to retire in the next decade. They required a £700,000 mortgage on a £1.5m family home with a plan to secure finance for 10 years, at which point they would downsize and retire.
As expected in this profession, the client’s income stream came from numerous sources, including the NHS, private practice, offshore work and consultancy. Therefore, the lender needed to be able to factor all income streams into account when considering the case.
Our Associate Director, Daniel Gracie, presented our client’s case to a lender who took a realistic and pragmatic approach, basing their decision on the client’s individual case rather than a ‘tick box’ exercise. Having fully understood our client’s requirements, we secured a five-year, fixed rate, interest only remortgage which allowed the client flexibility to retire and downsize earlier should they so wish.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
A lifetime mortgage is a loan secured against your home. Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up the repayments on your mortgage.
Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits. Home reversion plans and lifetime mortgages are complex products. To understand the features and risks, ask for a personalised illustration. If you are in doubt, seek independent legal and financial advice.