If you’re one of those people, we have good news for you. Later life mortgages are much more flexible than they used to be.
Most of our mortgages have no maximum age. Also, we may be able to offer you up to 80% loan to value (LTV) if you’re applying to borrow into retirement, or up to 70% LTV if you’re already retired.
How do I know I’ve applied for the right mortgage?
You may want to remortgage from one lender to another. Alternatively, you may want to buy a new home for your retirement.
Or you might want to raise funds for home improvements, or to help your children or grandchildren to buy a place.
Whatever your motivation, we can consider a term of up to 40 years, depending on your circumstances.
What type of mortgage can I apply for?
Some mortgages are specifically aimed at retirees. But being retired, or borrowing into retirement, doesn’t mean you’re restricted to retirement mortgages.
There are more options available than you might think, including:
Repayment mortgages
Some lenders will set age limits on certain types of mortgages. Typically, this is age 75. We don’t have a maximum age cap though, giving older borrowers more choice.
Interest only mortgages
You only pay the interest accrued each month, so your monthly payments will be lower than with a repayment mortgage.
Your mortgage balance won’t reduce though, so you’ll need to repay the full amount at the end of the mortgage term. You will therefore need to have what is known as a repayment strategy in place.
Part and part mortgages
Combine elements of repayment and interest only mortgages. Part of the money is borrowed on a repayment basis, while the rest is borrowed on an interest only basis.
Lifetime mortgages
Also known as equity release, you can usually raise funds for things like home improvements or to repay an existing mortgage. They can also help with general living or lifestyle costs.
They don’t require monthly payments. However, if you choose not to pay the interest monthly, it’s added to your balance.
An equity release mortgage is repaid when the last remaining borrower passes away or moves into care.
When the mortgage is due to be repaid, the balance can be much higher than the amount you borrowed.
Home reversion plan
Much like an equity release mortgage, no monthly payments are due on the amount borrowed, and the debt is only repaid when the last remaining borrower passes away or moves into care.
However, unlike any other kind of mortgage, you give up ownership of your home.
Retirement interest only (RIO) mortgages
These are only available to older borrowers, typically 55+. Rather than repaying the loan at the end of the term, it isn’t repaid until a significant life event.
This could be when you sell the property, or when the last remaining borrower dies, or goes into long-term care.
As with other interest only mortgages, you’ll have lower monthly payments than with a repayment mortgage. However, the initial debt remains, so you’ll still owe the full amount at the end of the term.
Can I apply for a mortgage with members of my family?
Joint Borrower Sole Proprietor (JBSP) mortgages, also known as family assisted or family boost mortgages, can help you buy with family.
They allow up to four people from two households to be named on the mortgage. However, only one or two people are named on the property deeds.
This means parents can help their children get on the property ladder, or vice versa.
Our JBSP mortgages do have an age limit though, which depends on how much you borrow versus the property’s value.
As you can see, whether you’re planning for retirement, or are already retired, there are plenty of options available.
So, do some research and decide which one is best for you. And if you’d like to review your mortgage options, why not contact us for a chat?
Give us a call on 0330 123 0723, email us at mortgages@suffolkbuildingsociety.co.uk or call into your local branch.
This article is for general information only and cannot be replied on as financial advice for individuals. Consult your professional adviser.
