Flexible mortgages in retirement

Posted on 17 February 2011 by Robert Smith

Flexible mortgages in retirementAge 68 Mortgage presently with CB to mature June 2012. Flexble interest only 2.24%. House recently formally valued £200k plus Loan £100k. Aware retirement loans such as Halifax may be available and if possible would like to take advantage of something like this or similar. Presently earning £30k PA, State Pension not presently being claimed in preference for lump sum in 2013. Like the idea of continuing a mortgage preferably on a flexible basis with option to deposit occational lump sums to reduce over a longer term. Do not want equity release. What advice or comments can you give?


The majority of Lenders now require the loan term to finish by the time you are aged 75, Clydesdale Bank by age 70. This is going to restrict the term of the mortgage you can take and without a repayment vehicle in place to repay the debt will mean that your monthly repayments will be very high.

Nearly all Lenders allow you to make over payments, depending on the deal chosen these may be restricted to 10% of the outstanding balance per month or a monetary amount such as £500 per month. Flexible deals which allow lump sum repayments do exist, but they usually have a slightly higher interest rate.

The Halifax Retirement Plan is designated as an equity release mortgage because it has no set end date and will run until the property is sold. It differs to most Equity Release mortgages in that you are required to repay the interest each month and so the mortgage debt is not increasing due to compound interest.

I recommend that you speak to your local Halifax and an independent mortgage adviser about 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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