Repaying an interest-only mortgage can be a daunting task, especially if you’re over 50 years old and facing limited options. Many people in this situation may find themselves unsure of what steps to take next. Here, we’ll explore some of the options available to you when your interest-only mortgage has expired.
1. Remortgaging:
One option available to you is remortgaging your home. This involves taking out a new mortgage with a different lender. You could choose a repayment mortgage, which would not only pay off the interest on the loan but also gradually pay off the loan itself. However, it’s important to note that remortgaging can come with its own set of costs and fees, so be sure to carefully weigh the pros and cons before making a decision.
2. Taking equity release:
Equity release is another option for those looking to repay their interest-only mortgage. This allows homeowners to release equity from their property to repay the loan. There are various options available when it comes to equity release, including lifetime mortgages and home reversion plans. It’s crucial to seek independent financial advice before considering this option as it can have long-term implications on your finances and inheritance.
3. Downsizing:
Downsizing is a popular option for those looking to repay their interest-only mortgage. By selling your current property and buying a smaller, more affordable one, you can free up funds to pay off the loan. This option also allows you to potentially reduce your living expenses and simplify your lifestyle. However, be sure to consider the costs associated with selling and buying a new home before making a decision.
4. Making an arrangement with your existing lender:
If none of the above options suit your current situation, you could consider making an arrangement with your existing lender. This could involve negotiating a repayment plan or extending the term of your mortgage. However, keep in mind that lenders may not always be willing to be flexible, so it’s important to communicate your situation clearly and seek professional advice if needed.
In conclusion, there are several options available to those over 50 years old who are looking to repay their interest-only mortgage. Whether you choose to remortgage, take equity release, downsize, or make an arrangement with your lender, it’s crucial to carefully consider your options and seek professional advice before making a decision. Remember, everyone’s financial situation is unique, so what works for one person may not necessarily work for another.
Mike Jones
Later Life Lending Specialist
Mike Jones is a later life lending specialist who is responsible for the “Mewstone Later Life Lending” service. Mike has years of experience in retail banking as well as extensive knowledge of the later life lending sector.
Choosing to release money from your home is a big decision and it’s important for you to understand all the options available to you. This means that he will always offer you unbiased advice. It doesn’t matter to us which solution or lender is recommend, as long as it is the right one for you.