Clearing an Interest Only Mortgage
Clients with interest-only mortgages can pay off their existing borrowing.
There are around 1.67 million[1] consumers with interest-only mortgages. Some of whom will have planned ahead, some who haven't. Even if you have planned ahead you may be facing a shortfall in the amount in your capital repayment vehicle to meet the amount due at the end of your interest-only mortgage.
How are we using lifetime mortgages to help clients?
If you don't have the capital to repay the residential mortgage or have a capital shortfall we may be able to help you solve that problem. You are coming to the end of your Interest-only term and are over 55 years old with significant equity in your home. You may be able to:
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Free up tax free cash from your home to repay the original mortgage;
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Free up cash to enjoy your retirement;
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There are no affordability checks;
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You decide to pay the interest on the lifetime mortgage as you're used to making those payments in your budget;
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Later on you decide to stop paying the interest - easy, you can;
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You remain in the home you know and love, living out your later years in comfort.
[1] FCA urges action on interest-only mortgages, FCA, January 2018.
Equity release may impact the size of your estate and it could affect your entitlement to current and future means-tested benefits.