Posted on 3 February 2011 by V. Gunton

Property was purchsed in 1996 for £250,000 thus is now worth well over £500,000.

At purchase I took a lifetime mortgage (interest only; term 40 years) for £30,000 from Halifax.  In 2003 I took a further advance of £40,000 and this was granted with virtually no formalities. It was used for improvements to the property.

I now wish to take a further £15,000 for property improvements but Halifax are being recalcitrant in providing information. Even quoting a £900 arrangement fee!  Any ideas on other options?

I am presently aged 69 and my pension income is c.£95,000 p.a.

V Gunton,

I am afraid that you are a victim of mortgage regulation. The Halifax Retirement Homeplan was an interest only mortgage where the capital was only repaid on the sale of the property. A nominal term of 40 years was used as this would cover most people until they died and the property was subsequently sold. In 2004 this type of arrangement was deemed to be a Lifetime mortgage and subject to the same rules and regulations as any other Equity Release mortgage. I understand that this product is no longer available in branch although any existing borrowers such as yourself can benefit from any of the current Halifax product transfer range upon request.

The alternative to taking a further advance from Halifax is either another Equity Release mortgage, whereby the capital is not repaid until the property is sold or your death if earlier, a standard residential mortgage or a personal loan.

Both a residential mortgage and a personal loan will have to be repaid in full within the foreseeable future and reading between the lines I don't think this is what you are looking for. Equity Release mortgages are a specialist area due to the additional regulatory requirements and I recommend that you speak to an independent mortgage broker about your situation. If they are not qualified they will be able to refer you to one of the country's leading independent Lifetime mortgage arrangers.


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