What does it mean to be Equity Rich but Cash Poor

Posted on 6 February 2017 by GEORGE

Hi I own 3 side by side properties in oxford 2 are let and mortaged, one is a new house I built and does not have a mortage I am equity rich but cash poor I am 62 and my wife is 57 and we would like a lump of money to start enjoying our life a bit better, is there anyway we could raise a small mortgage on the new property as we don't want to get involved in equity release schemes.

Hi George,

Most lenders in the UK will lend to people until the age of 75, there are some who restrict lending to 65 and others who have a maximum age of 75 at the start of the mortgage. What they all have in common is they will need to be sure that you can afford the mortgage you take on and that you have the means of repaying it.  The last thing they or you would want would be to find yourselves in the position of being made homeless because you have got to the end of your mortgage and have no way of repaying the debt.

Read more about borrowing into retirement

Presuming affordability isn’t an issue, then they will look at the property you want to mortgage.  If you have built the property yourself then they will want to see that you have obtained a structural warranty and guarantee.

The alternative to raising a mortgage on your residential property would be to arrange it on one or both of the let properties. Mortgage Interest can normally be offset against rental income as an allowable expense so there may be some tax advantages to doing it this way?

I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers.  Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help you find the right mortgage for your situation.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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