5th November 2018
If you do have an interest-only mortgage hopefully you have worked out a plan to pay off the capital at the end of the mortgage term. These may include:
It is important that you keep track of these investments to ensure that when your mortgage comes to term you have the financial means to pay back the original loan amount. If you have more than 50% equity in your property and an approved repayment plan in place to pay back the original loan, then your repayment facilities should probably be enough.
But what can you do if you do not have a plan to pay back the original loan? Firstly, do not panic – there are several options that can be considered.
Always ask your lender about any fees involved when switching or amending your original mortgage product.
Clients with interest-only mortgages can pay off their existing loans by taking out a Lifetime Mortgage, enabling then to stay in the home that they love.
Either way you can remain living comfortably in your own home for as long as you choose.
There is around £1.5 trillion in housing equity owned by people aged over 55 years yet only 3%¹ of those eligible have chosen to unlock the value in their homes to meet their current financial needs or dreams. There are an estimated 1.67 million² customers with interest-only mortgages yet 13%³ say they did not have a separate plan in place to pay back the original loan.
If you would like to consider taking out a Lifetime mortgage you must be:
¹ Silver Spenders, Legal &General Home Finance Ltd, 2018, page 3.
² FCA urges action on interest-only mortgages, FCA, January 2018.
³ GFK. Interest-only mortgages. Consumer research – consumer strategies for repaying the loan at the end of the mortgage term.
Equity release is the answer to so many financial questions. If you would like to know more about it, and see if it could be the right move for you, please book an appointment or request a call-back
We will be in touch as soon as possible to arrange a convenient time for a meeting, which is completely free of charge and without obligation.
I'll be in touch as soon as possible. If you'd rather call me in the meantime, please feel free to give me a call on 01489 45 45 45