For those of you who want to use the Equity in their home but do not like the idea of a traditional Equity Release Mortgage, then the Retirement Mortgage from Hodge Lifetime may offer a solution?
The Retirement Mortgage allows you to make interest only payments each month, which means as long as you make the interest only payments each month, the overall Mortgage debt will not increase.
This differs from some traditional Equity Release Lifetime Mortgages, where if the interest is rolled up and added to the Mortgage, the overall debt will increase.
There are advantages to both methods, but both are classed as Lifetime Mortgages, as there is no end term. The appeal of Equity Release is there is no requirement to make any payments and there are no affordability checks. However not everyone likes the idea of interest being added and rolled up with the amount outstanding increasing every year( However Most Equity Release Plans under the Equity Release Council do have No Negative Equity Guarantee)
The Hodge Retirement Mortgage is designed as an interest only Lifetime Mortgage. As Interest Only payments are required, then affordability must be taken into account when the lender assesses any application. The lender will look at your current income and designated retirement date9 if applicable) and will also look at what income you will have or have in retirement.
Retirement Mortgage Eligibility
In order to qualify for the Retirement Mortgage your property must be worth at least £100,000. You must be 55( youngest borrower if joint) or over. The maximum loan available on interest only is based on age and affordability. The maximum loan to values are as follows
- Age 55 to 70: 50%
- Age 71 to 75: 45%
- Age 76 to 80: 40%
The Retirement Mortgage is not for everybody, but it may offer a solution to those that can afford to make interest only payments and do not wish to use rolled up interest option.The retirement Mortgage can be used to raise funds for any reason, including repaying existing Mortgage off or raising funds for Home Improvements etc.
A qualified Lifetime Mortgage adviser will be able to advise you, if a Interest only Lifetime Mortgage is the correct option of you. As well as looking at any other options available to you, ensuring that any Mortgage is suitable for your needs.
The truth is more needs to be done to help older borrowers, we need more innovative solutions to their Mortgage needs. As it stands there a few options available to older borrowers, and more needs to be done. The Hodge Retirement Mortgage is a welcome addition to the products available and it at least brings something different to the table.
For help or advice on borrowing into retirement, speak to one of our professional Lifetime Mortgage advisers now on 0141 280 1992 or use the “Call Me Back” link at the top of the page and we will call you back.
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.