Mortgages and your plan for retirement

Increases in property prices, early retirement, greater life expectancy and a desire for a long and enjoyable retirement mean many of our clients seek advice on using the equity they have accumulated in their property over the years to their best advantage.

Lifetime Mortgages

If you are a homeowner and over 55, it is possible to release some of the equity in your home via a scheme which can turn some of the value of your property into cash without any monthly repayments. This option should be considered carefully as whilst you are not required to make monthly payments instead the interest is added to the outstanding mortgage balance. Upon death or in the event that you need to go into care both the capital and any interest accrued is repaid via the sale of the property.

Significant increases in house prices, coupled with changes in family attitudes, mean more and more people are finding out just how these schemes can help them enjoy a more comfortable retirement.

When giving consideration to a Lifetime Mortgage we always recommend that independent legal advice is sought by both the client and the family where appropriate.

There are, of course other options available and these will be discussed as part of the consultation process

Offset Mortgages

Some our clients not wishing to take a lifetime mortgage have opted instead for an offset mortgage. This means you can offset the interest from your savings and current account balances against the total amount owing on your mortgage. Foregoing interest on your savings/current account means you are not charged interest on the equivalent mortgage balance.

The option to retain the original mortgage balance and only pay interest on the difference between the “savings pot” and the mortgage balance can be attractive, as long as the value of your savings and current account balance is at least equal to your mortgage balance no actual mortgage payment is made until savings are reduced.

This option is not suitable for everyone as if you need to use your savings then you will need to make interest payments to the lender until you have restored your savings to the same level as your mortgage.

There many options for clients either approaching and having reached retirement, at this crucial stage in your life it our belief that you should seek independent financial advice to discuss all of the options available to you.

This is a Lifetime Mortgage. To understand the features and risks, ask for a personalised illustration.

Your home may be repossessed if you do not keep up repayments on your mortgage

There is a fee for mortgage advice, our usual fee is £200 payable upon completion. We also get paid commission by the lender.