If you are on an interest-only mortgage that is nearing its end, you may be considering the next step. The good news is, you won’t be alone. Nearly 136,000 interest-only mortgages are due to mature in 2017, with a combined value of almost £16 billion. Fortunately, lenders are innovating their products and making more options available for those with maturing interest-only mortgages.
A study of those with interest-only mortgages revealed that some borrowers have no plan in place for how to take care of their mortgage reaching maturity. Borrowing into later life can be a complicated scenario and one that needs careful consideration. As your adviser, we would love to help you plan your next step and look through your options.
To get you started before our meeting, here are just a few ways that lenders can help those borrowing later in life…
There are many specialist lenders that cater for those that require bespoke borrowing options later in life. Several have been working to innovate their over 55s range of mortgage products. These include residential interest-only mortgages, specifically designed for those aged 55 and over, and other tailored older borrower solutions.
Some building societies and smaller lenders want to ensure that age is no longer a problem for those that want to borrow into retirement. One lender recently launched as many as 28 new older borrower products, which includes several interest-only options. Specialist lenders often don’t use computers to decide whether you should have a mortgage, and want to help those that need to consider a more nuanced post-retirement borrowing option.
Later life lending
The percentage of people aged over 66 when their mortgage ends climbed from 22% in 2012 to 39% in 2016, a significant increase in just a few short years. Mainstream lenders are now extending their maximum age limits to follow the trend.
Several high street lenders have recently increased their maximum age to 80 and in some cases 85. In their determination to help older borrowers, some lenders even have no maximum age limit whatsoever.
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